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Predator Oil & Gas Holdings Plc
Annual Report for the Year ended 31 December 2020
ESG focussed with substantive
progress on three continents
in Energy Transition to reduce
carbon emissions
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Contents
Business Review
1 Chairman’s statement
3 Strategy
4 Group Strategic Report
11 Key Performance Indicators
12 Group Structure and List of
Assets
30 Principal Risk and Uncertainties
Our Governance
35 Report of the directors
38 Board of directors
39 Corporate Governance Report
42 Directors’ Remuneration Report
Investor Information
69 Corporate Information
Financial Statements
47 Independent Auditor’s Report
50 Consolidated statement of
comprehensive income
51 Consolidated statement of
financial position
52 Consolidated statement of
changes in equity
53 Consolidated statement of
cash flows
54 Statement of accounting
policies
58 Notes to the financial
statements
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BUSINESS
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INVESTOR
INFORMATION
Chairman’s statement
Dear Shareholder,
On behalf of the Board of Directors, I hereby present the consolidated
financial statements of Predator Oil & Gas Holdings Plc (the “Group”,
“Predator” or the “Company”) for the year ended 31 December 2020.
2020 has been dominated by the global public health emergency
caused by the spread of the Covid 19 virus. This has created significant
operational challenges and has at times adversely impacted the global
economy, financial and equity markets and oil and gas commodity
prices. During these uniquely challenging times we moved quickly
and dealt comprehensively with the potential impact of coronavirus
on our business operations and business development strategy.
As a result of the Company’s swift response to the rapid spread of
coronavirus and the mediumterm uncertainty this created, we were
able to maintain and, indeed, expand the level and effectiveness of
our business operations compared to 2019.
We continued to develop and implement our Environmental, Social
and Governance (“ESG”) focussed strategy, with substantive progress
in “energy transition” projects to reduce carbon emissions on three
continents.
Onshore Trinidad, the Enhanced Oil Recovery pilot project injecting
anthropogenic carbon dioxide to recover additional oil (“CO2 EOR”)
from the InnissTrinity field was successfully operated and executed
by the Company. 458.1 metric tonnes (458,100 kg) of CO2, that would
otherwise have been vented into the atmosphere by one of Trinidad’s
ammonia plants, were injected intermittently during the year under
review without any increase in background CO2 readings at the
surface. 2,928 barrels of cumulative enhanced oil production was
achieved from a single monitoring well after one month following the
cessation of CO2 injection, due to the subsurface migration of the
CO2 towards the monitoring well. One additional well was also
returned to production for a short period to assess enhanced oil
production rates. If burned, this oil would produce 1,257,895 kg of
CO2. The combined effect of CO2 injection with the additional oil it
produced for this period resulted in a net CO2 emissions reduction
of 458,100 kg of CO2 and “greener” oil (799,795 kg taking into
account C02 sequestration credits) closer to the C02 emissions level
of natural gas.
The success of the CO2 EOR pilot project demonstrates the potential
for Trinidad’s onshore mature oil fields to become sinks for the large
scale sequestration of anthropogenic CO2. At the same time, it
provides the commercial model whereby Energy Transition can
ensure that local economies and communities, which are very heavily
dependent upon the oil and gas sector in Trinidad, are at the same
time financially supported. The Trinidadian Ministry of Energy and
Energy Industries has now established a carbon capture and CO2 EOR
steering committee. Your Company’s successful operations have been
significant in showing the way for the largescale reduction of CO2
emissions, for carbon capture and carbon sequestration as envisaged
by the steering committee.
In northern Morocco, preparations for the drilling of the MOU1
exploration well in the Guercif Licence were advanced with the
ratification of the Environmental Impact Assessment by the Ministry
of Energy and Mines and Environment. This is valid for three well
locations for five years from the effective date of issue of 29 January
2020. We have entered into a rig option agreement, without incurring
any financial liabilities, with Canadian drilling contractor Star Valley
Drilling Ltd. They were undertaking an extensive drilling programme
for SDX Energy Plc in the Rharb Basin west of Guercif using its Rig
No. 101. Subsequently MOU1 well planning was suspended as the
impact of the rapid spread of Covid 19 led to international travel
restrictions and national lockdowns. The focus of the Company’s
activities then moved to technical studies which resulted in the
identification of the new MOU4 Prospect. This led to a 92% increase
in best estimate prospective gross recoverable gas resources for the
primary Tertiary reservoir targets, based on a new independent
competent persons report by SLR Consulting (Ireland) Ltd. A review
of gas development options was also undertaken, with priority being
given to an early option to monetise gas through a pilot compressed
natural gas development at Guercif. It was concluded that supplying
the Moroccan gas market with compressed natural gas to replace
imported fuel oil would reduce CO2 emissions by up to 33% annually
for the substituted volume equivalent of fuel oil. In the longer term,
our gas could support the conversion of Morocco’s heavily coalreliant
power generation capacity to gas firing. This could lead to a 50 to 60%
reduction in CO2 emissions for the older coalfired power plants.
In Ireland, during the year we have continued with engineering
studies to develop an engineering solution that would allow liquified
natural gas (“LNG”) to be imported via existing infrastructure at the
site of the Kinsale gas field after decommissioning has been
completed. The proposed Floating Storage and Regasification Unit
(“FSRU”) design concept involves no new infrastructure but utilises
the existing Inch terminal and Kinsale subsea gas pipeline. Importantly
there will be no shiptoship transfer of LNG offshore Ireland and
therefore the unique design concept developed for Ireland has
minimal environmental impact. It will operate with the minimum
possible ecological and environmental footprint, reducing and
potentially eliminating CO2 emissions from its operation. Financing
for the project is under discussion and will be assisted by an
application for an exemption from rights of third party access.
Ireland is one of the very few European Union (“EU”) countries that
has no LNG facilities and no gas storage capacity to address security
and diversity of gas supply. Security of energy supply is considered by
the Irish regulators to be “in the public interest”, a fact recognised
indirectly by there being no ban on LNG in Ireland’s recently approved
Climate Bill.
The EU is reported to be expanding the role of gas in green finance
by defining it as a sustainable source of energy. In this context we also
remain focussed on seeking to secure a successor authorisation for
our Ram Head geological gas storage conceptual project off Cork in
the Celtic Sea. Ram Head offers opportunities to store natural gas,
hydrogen and CO2. Most importantly, development of Ram Head for
storage is a commercial proposition, given the ability to generate
revenues from gas sales to create substantial storage capacity. There
is no other competing commercial gas storage proposition for
offshore Ireland. Additional gas supplies should make it possible to
completely eliminate any residual coalfired and oilfired power
generation in Ireland and to replace the use of heating and fuel oil,
through substitution with affordable compressed natural gas.
Your Company’s CO2 sequestration experience
in Trinidad,
management’s extensive 40 years of experience and understanding
of the gas sector offshore Ireland and the Company’s unique portfolio
of gas projects in Ireland puts it at the forefront of the development
of a greener energy hub in the Celtic Sea. This would integrate energy
sourced from interruptible renewables and from gas with the
capability for subsurface offshore storage, in reservoirs understood
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Chairman’s statement (continued)
by the Company, to provide a nearterm viable solution to Ireland’s
security and diversity of energy supply issues.
innovative, pragmatic solutions to national energy transition issues
in a timely but socially just and equitable manner.
As I write, the outlook for the coming year is positive; with investor
sentiment, financial markets and commodity prices recovering after
the shock of the COVID19 pandemic. We are wellfunded to
implement and expand our operational programmes – and to do so
on schedule. This includes the drilling of the first of our many gas
prospects in the Guercif Licence, onshore Morocco, which we believe
will derisk potentially transformational prospective gas resources
that have a clear nearterm path to early monetisation and for a
reduction in Morocco’s CO2 emissions.
I should like to thank our shareholders for their continued support
over the year. I expect the coming months to be busy and exciting
ones for Predator ‘s investors.
Dr Stephen Staley
Chairman
27 May 2021
In Ireland the Single Electricity Market Operator on 6 January 2021
issued an “amber warning”. The market supervisor issues amber
warnings where there is enough available generating capacity to meet
likely demand for electricity but where the amount held in reserve is
less than ideal. Gas will be needed as the Irish State decarbonises:
to ensure continuity of electricity supply and to avoid a failure of the
Irish power system which would have “a catastrophic effect on normal
economic life”, an Irish Academy of Engineering (IAE) report has
found. EirGrid, the stateowned operator of the electricity
transmission network, has admitted that it will rely on fossil fuels to
maintain stable power supply. Against this background, your
Company’s decision in 2019 to prepare for this situation has ensured
that we are now the leader in terms of having a viable solution which
can inform the strategically important decisions that must be taken
by the Irish regulatory authorities and government to prevent this
disruption of normal economic life. Reduced reliance on imported gas
through the UK Interconnector, as Corrib Gas Field production
declines further, is also desirable and is compensated for by providing
an alternative source of LNG from a transparent origin where there
is no fracking to produce shale gas.
At a corporate level the Board was restructured with the appointment
of myself as permanent Nonexecutive Chairman and Mr Louis Castro
as Nonexecutive Director. The Board and governance is significantly
strengthened by the appointment of Louis, who has 30 years in the
industry and the City. Interim Chairman Carl Kindinger retired from
the Board; we would like to thank Carl for his contribution to the
Company.
During the year the Company strengthened its finances through two
oversubscribed Placings to raise an aggregate of £4.008 million
(before expenses). As a result we were able to eliminate debt by
settling in full the outstanding Arato Convertible Loan Notes. The
Company repaid the outstanding £746,000 of the Loan Notes
together with redemption fees in cash. Swift decisions to avail
ourselves of these opportunities demonstrates the Board’s
commitment to maintaining adequate levels of working capital as a
precaution against unforeseen events. With the benefit of hindsight,
the development of the global COVID19 pandemic justified this
prudent proactive approach to financing opportunities. This served,
and continues to serve, our shareholders’ interests well as the full
impact of COVID19 escalated throughout the year. It has allowed us
to deliver a level of operational success and business development
activity that is resilient to the impact of COVID19 and which should
provide a solid foundation for share price appreciation in the coming
year.
In conclusion, despite the immense challenges presented by the
COVID19 pandemic, your Company’s management has made good
progress towards implementing its business development strategies.
This has included the successful execution of CO2 EOR and
sequestration in Trinidad and the identification of additional
prospective gas resources in Morocco together with a route to their
early monetisation and their substitution for higher carbon intensity
energy sources. In addition, Predator has developed a technically and
commercially viable FSRU LNG engineering solution to contribute in
the shortterm to addressing Ireland’s security of energy supply
problems. Through the development of these projects on three
continents your Company is building the foundation for meaningful
corporate ESG credentials. We have sought to do this through building
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Strategy
The Company’s core strategy is to focus on an accelerated Energy
Transformation Scenario to greener energy based on expanding the
pragmatic role of gas as a “sustainable” source of energy,
collaboration with renewable energy project developers, and
utilisation of existing infrastructure to determine a common route to
achieve a timely and socially just energy transition.
The Board believes that the Company’s mediumterm future relies on
focussing on gas as being the flexible energy source to replace coal
and oil as a fuel for power generation, thereby reducing C02
emissions as gas by comparison is less CO2 pollutant.
Reducing current high levels of CO2 emissions by replacing carbon
intensive fuels in the jurisdictions chosen by the Company to apply
its business development strategy is a realistically achievable near
term target. The Company has assembled material and influential
equity positions in a portfolio of assets combining existing gas
discoveries and new gas prospects adjacent to infrastructure owners
seeking new opportunities to utilise spare capacity. CO2
sequestration forms a key element of the business development
strategy with production opportunities for enhanced “greener” oil
providing the commercial model for CO2 sequestration and a socially
just and equitable protective umbrella for local communities and
economies largely dependent on the oil and gas sector for their
livelihoods.
The Company’s business plan is being executed to minimise where
possible capital expenditures through:
–
–
–
prudent lowcost investment in existing mature oil fields for C02
EOR production revenues to offset against the cost of CO2
sequestration;
leveraging with third parties our management’s gas experience,
industry relationships and the Company’s licence positions
around gasgathering infrastructure to validate our commercial
understanding of the gas marketing potential and the potential
of our exploration and appraisal assets;
through providing a commercial, technical and engineering
framework for gasfocussed M & A transactions and farmouts to
defray CAPEX for subsequent appraisal drilling/development.
Geological risk mitigation has been enacted through screening
suitable projects for the Company’s portfolio using management’s
extensive and relevant industry experience. Farmout transaction risk
is being addressed by improving development economics and
lowering commercial risk by assembling projects close to
infrastructure and in areas where there is a high demand for
indigenous gas to improve security of energy supply and reduce CO2
emissions from more carbonintensive energy sources.
The Company’s strategy recognises our opportunities for becoming
an innovative catalyst for collaborative symbiotic relationships with
the renewable energy and gas storage sectors that accelerates energy
transition whilst maintaining and enhancing security of energy supply
that protects against the “economic shock” of accelerated Energy
Transformation. Combining gas production with gas and hydrogen
storage capacity and providing backup for interruptible wind power
together with subsurface CO2 sequestration in former oil and gas
reservoirs provides the commercial and financing structure for green
energy hubs around existing underutilised infrastructure.
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Group Strategic Report
for the year ended 31 December 2020
The directors have voluntarily disclosed the Group Strategic Report
for the year ended 31 December 2020 although this is not required
under Jersey regulations.
PRINCIPAL ACTIVITY
The Group was formed for the purpose of acquiring assets consistent
with the Company’s business development strategy. These may
comprise businesses, import licences for LNG, material ground floor
equity positions in principally gas licences, or the targeting of
companies that have operations in the oil and gas exploration and
production sector. It will then look to develop and expand such assets
where there is an opportunity for reducing CO2 emissions. The Group
seeks to develop and provide sources of greener energy that
contribute to reducing C02 emissions and accelerate energy transition
to less carbonintensive fuels.
FAIR REVIEW OF THE BUSINESS
Morocco
The Guercif Petroleum Agreement (“Guercif PA”) is an onshore licence
awarded to Predator in 2019. It is operated by the Company’s wholly
owned subsidiary Predator Gas Ventures Ltd. (“PGVL”). PGVL (75%)
operates the Guercif PA in joint venture with the Office National des
Hydrocarbures et des Mines (“ONHYM”) acting on behalf of the State
(25%).
During the early part of the year the Environmental Impact
Assessment was ratified by the Ministry of Energy and Mines and
Environment. It is valid for three wells for five years from the effective
date of issue of 29 January 2020.
A rig option agreement was entered into, without incurring any
financial liabilities, with Canadian drilling contractor Star Valley
Drilling Ltd., who were undertaking an extensive drilling programme
for SDX Energy Plc in the Rharb Basin west of the Guercif Basin using
its Rig No. 101. The rig option agreement allows for one initial well
and up to six contingent wells.
The Company appointed a highly experienced Project Drilling Manger
(Moyra Scott) to oversee well planning and drilling operations.
The Company’s executive management team put together the draft
geological programme and draft well design and drilling programme
for the newly designated MOU1 well as the basis for seeking quotes
for third party well services and logistical field support. These were
received and reviewed by the end of Q1 2020.
On the basis of the quotes received a preliminary drilling budget for
MOU1 was put together and later approved by ONHYM.
Most of the well inventory required for the drilling of MOU1 was
identified as being available in Morocco, which allowed a drilling
schedule to be developed that facilitated drilling commencing in
Q2 2020.
A Moroccan branch company was set up to create the fiscal entity to
avail of the VAT exemption benefit for companies operating in the oil
and gas sector in Morocco.
Discussions with several insurance providers were initiated to begin
the process of putting in place operator’s well insurance for the
MOU1 drilling programme.
The MOU1 well location was selected at a point 1.7 kms northwest
of the existing well GRF1, drilled in 1972 by Elf Aquitaine. This
location will test an interval between 1,000 and 1,100 metres drilling
depth interpreted to be equivalent to the gas producing reservoirs in
the Miocene (Tortonian) Guebbas formations of the Rharb Basin,
which is on trend to the west of and geologically coeval with the
Guercif Basin. Defining trap and seal integrity at this location will
derisk the seismic amplitudesupported MOU2 Prospect to the
north for appraisal drilling. Best Estimate and High Estimate
prospective gross recoverable gas resources for the MOU2 Prospect
are 426 and 879 BCF respectively based on a Competent Persons
Report by SLR Consulting (Ireland) Ltd. completed in Q1 2020.
GRF1 also had dry gas shows within an interval equivalent to the gas
producing reservoirs in basal Guebbas and top Hoot formations of
the Rharb Basin. This fact combined with evidence of thermogenic
dry gas in soil samples collected immediately to the northwest of
GRF1 by TransAtlantic, a previous operator, and the presence of a
strong seismic amplitude anomaly consistent with structural closure
within the interpreted Guebbas equivalent at the MOU1 proposed
well location, dictated that the selection of the MOU1 well location
represented the lowest risk opportunity to find gas in reservoirs
equivalent to those of the Rharb Basin. Trap size and evidence of the
possibility of an extensive Lower Jurassic thermogenic gas kitchen are
reasons for anticipating potentially larger individual gas prospects
than have so far been encountered in the Rharb Basin (but do exist
in the offshore as evidenced by Repsol’s Anchois gas discovery in
2009). Basal Guebbas and Hoot equivalent reservoir targets are
forecast to occur between 1,200 and 1,500 metres depth in MOU1
and take up to 15 days to reach.
The well will be continued to 2,000 metres depth or to the top of the
Jurassic, whichever occurs first, and will evaluate secondary targets
that were interpreted as gasbearing on conventional historical
petrophysical logs for GRF1. The well is conservatively anticipated to
take up to 30 days to drill to reach its commitment depth or the top
of the Jurassic. Well completion and rigless testing is included in the
well evaluation programme.
The Company’s executive management team and country manager,
project drilling manager and rig contractor made a site visit in March
2020 to the MOU1 well location at Guercif to survey in the well
location, assess the scope of civil works required for the well pad
construction and access road, evaluate the availability of water and
electricity supplies for drilling, identify any permitting issues (on
agricultural lands), and to review local infrastructure (services,
highways, railroad and Maghreb gas pipeline). No issues were
identified that would impact well planning and the drilling schedule.
At the end of Q1 2020 MOU1 well planning was suspended to avoid
any unnecessary commitment of working capital as the impact of the
rapid spread of the coronavirus led to international travel restrictions
and national lockdowns.
At this point the Company refocussed on evaluating additional
prospectivity in its Guercif asset and the ability for nearterm
monetisation of gas yet to be discovered to minimise the commercial
longer term impact of COVID19 on raising large amounts of
development finance for complex gastopower projects that could
be delayed by ongoing COVID19 inertia. These studies resulted in the
identification of a new MOU4 Prospect covering 31.7km² and located
6 kilometres northeast of the MOU1 well location. As a result, a 92%
increase in Best Estimate prospective gross recoverable gas resources
for the primary Tertiary reservoirs was reported in a new independent
Competent Persons Report by SLR Consulting (Ireland) Ltd.
announced in December 2020. Houstonbased NuTech completed a
new petrophysical study of the GRF1 well which determined that the
gross interval between 1,386 and 1,413 metres TVD KB (27 metres)
had interpreted gas saturations in the range 37 to 51%, whilst a gross
interval between 1,635 and 1,925 metres TVD KB (290 metres) had
gas saturations ranging from 30 to 77%. The new petrophysical
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analysis supports the presence of a gas charge and is consistent with
thermogenic gas shows (mainly methane, but with traces of ethane
and propane) recorded on the GRF1 mud logs and the small volume
of gas recovered on a Formation Interval Test at the time of drilling in
1972.
The modern NuTech petrophysical analysis has identified the upper
part of the interval between 1,386 and 1,413 metres TVD KB in GRF1
as a new additional deeper primary target for the MOU1 well at
approximately 1,400 metres drilling depth. As a result, MOU1 will
also now present an opportunity to evaluate the extreme western
edge of an interpreted Tertiary fan complex forming the new MOU4
Prospect. Best Estimate and High Estimate prospective gross
recoverable gas resources for the MOU2 Prospect are 393 and
944 BCF respectively based on a Competent Persons Report by SLR
Consulting (Ireland) Ltd. completed in December 2020.
The same studies also moved the MOU3 Prospect, 5 kilometres to
the southeast of the MOU1 well location, to “drill ready” status.
Additional gas prospectivity has been identified at the base of the
Tertiary immediately above the Jurassic and within the Jurassic in
several large structural features requiring new seismic acquisition to
enable maturing into firm drilling targets. The prospect and lead
inventory within the Guercif PA have therefore been significantly
increased as a result of an enforced period of operational downtime
due to COVID19 restrictions.
A review of gas development options was also undertaken following
COVID19 lockdown, with a specific focus on developing a capital and
operating cost model for transport by road of compressed natural gas
(“CNG”) to Morocco’s lucrative industrial market, where significantly
higher gas prices can be obtained. The scoping criteria for the pilot
CNG project was a delivery profile of 10 mm cfgpd for a minimum of
5 years with scoping after tax netback profit of at least US$ 5/mcf
based on a sales price of US$ 10 – 12 /mcf. Critically CNG replacing
imported fuel oil would reduce CO2 emissions by up to 33% annually
for the substituted volume equivalent of fuel oil.
Trinidad
At the beginning of the year the Companyoperated CO2 delivery and
injection system was successfully installed, commissioned and tested
at its dedicated site in the AT4 Block in the InnissTrinity oil field
onshore Trinidad. CO2 was injected into the AT5X well at variable
initial injection pressures and volumes to test the effectiveness and
reliability of the injection equipment. The integrity of the Company’s
AT5X downhole recompletion method for CO2 injection was also
successfully validated. The surface CO2 monitoring system was
calibrated and tested for any potential leakage of C02. The data
gathering network and realtime Vsat equipment and remote access
links were also tested. All systems, including HSE protocols,
functioned successfully, as predicted by the Company’s executive
management team’s meticulous preinjection project planning,
engineering design solutions and installation oversight.
During Q2 2020 the necessary regulatory approvals were received to
allow continuous C02 injection over a period of one month from
May 18 to June 17, 2020. The objective was to vary injection
pressures and CO2 volumes in order to determine optimum
parameters for maximum costeffective static reservoir pressure
buildup. During the year 458.1 metric tonnes of CO2 were injected
in several phases of trial C02 injection, equivalent to 458,100 kg.
Anthropogenic CO2 was trucked in liquid state from one of Trinidad’s
ammonia plants under the terms of an exclusive agreement with
Massy Gas Products (Trinidad) Ltd. AT5X static reservoir pressure for
the injected Herrera #2 Sand stabilised at 84.561 psi above pre
injection bottom hole pressure by 29 July 2020, encouragingly
consistent with the Company’s prePilot desktop reservoir
engineering model. There was no increase in background C02 around
the surface facilities.
During Q3 2020 several monitoring wells in the AT4 Block, specifically
AT4, AT6, AT7, AT8 and AT10, showed evidence of a C02induced
pressure effect at surface, beginning approximately one month after
the cessation of C02 injection at AT5X. C02 injection also provided
pressure support for the AT12 production monitoring well as
demonstrated by increasing surface pressure with enhanced oil
production beginning again approximately one month after the
cessation of C02 injection at AT5X.
Continual monitoring of the single producing well AT12 showed
enhanced oil production from midJuly through August averaging
21.3 bopd. This was 69% higher than the prePilot reservoir engineering
forecast, calibrating prorata to the 12.4% volume of CO2 actually
injected to date versus that to be injected to reach the prepilot forecast
plateau for enhanced oil rates from the Herrera #2 Sand in AT12.
The data collected from the initial period of continuous CO2 injection
and the ensuing period of well monitoring, to observe well responses
to CO2 injection, facilitated a commercial decision to seek regulatory
approval to move to the next stage of the pilot CO2 EOR project. This
involves at least 9 months of continuous CO2 injection to allow for
increasing reservoir pressure buildup to a level close to the prepilot
reservoir engineering maximum safe limits, subject to any operational
constraints that may or may not develop during continuous CO2
injection.
By the end of the year, 2,928 barrels of enhanced oil production had
been achieved and AT5X had been returned to production in order
to assess its relative merit as a production well versus a C02 injection
well. AT13 was the subject of a workover to convert to a CO2 injection
well and C02 was injected to test its injection attributes.
Pursuant to the Well Participation Agreement (“WPA”) dated
17 November 2017 as amended by Supplemental Agreement No.1
dated 31 May 2018, Supplemental Agreement No.2 dated 21 January
2019 and Supplemental Agreement No.3 dated 26 September 2019
between FRAM Exploration (Trinidad) Ltd (”FRAM”) and Predator Oil
& Gas Trinidad Ltd (“POGT”), POGT served notice on 14 July 2020 of
its intent to exercise its option under Recital B of the WPA to make a
lower opportunistic cash offer of US$1.75 million (the “Offer”) to
enter into a Share Purchase Agreement to acquire the entire
outstanding issued share capital of FRAM, assuming zero net debt at
the time of Completion, and Subject to Contract, certain Conditions
Precedent, technical, legal and commercial due diligence. The validity
of the Offer expired at 5pm UK GMT on Tuesday 21 July 2020 without
a response from FRAM. The Company subsequently decided not to
pursue acquiring ownership in line with its prudent policy of
managing cash resources through the then reemerging COVID19
crisis. The WPA was amended by Supplemental Agreement No.4
effective 22 September 2020 whereby the deadline to making an offer
to acquire FRAM was extended to 30 April 2021.Subsequently it has
been decided not to pursue the option to acquire FRAM under the
original commercial terms, but the Company might still seek an
acquisition of FRAM if new commercial terms were to be negotiated
at any time in the future.
The Heads of Agreement (“HOA”) for the C02 Gas Supply Contract
with Massy Gas Products (Trinidad) Ltd. (“Massy”) was amended by
Supplemental Agreement No.7 dated 30 September 2020 to extend
the Exclusivity Period given under the terms of the HOA until
31 March 2022.
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Group Strategic Report
for the year ended 31 December 2020 (continued)
The operational success of the early stages of the InnissTrinity pilot
CO2 EOR project allowed the Company to meet with the Ministry of
Energy and Energy Industries (“MEEI”) at the highest level to present
the results and to discuss future C02 EOR initiatives. These included
VAT relief for C02 EOR operations and investment and the
development of a “C02 EOR Services Licence” for qualified CO2 EOR
service providers, the potential future terms of which only the
Company could meet at present, that would enable other operators
to engage such services secure in the knowledge that the service
provider had been given regulatory and environmental approval by
the MEEI to operate CO2 injection equipment.
The Company opened discussions with several incountry operators
concerning the provision of its C02 EOR experience and knowhow
covering a number of mature onshore oil fields held under
Incremental Production Services Contracts. The extension of such
contracts now requires a commitment for an investment in secondary
oil recovery (waterflood, less effective in Trinidad’s onshore fields,
and/or CO2 EOR).
Ireland
During the year the Company incorporated a new subsidiary Predator
LNG Ireland Ltd. (“PLIL”) to avail itself of an opportunity introduced by
the executive management team through their historical network of
downstream business relationships developed over 40 years in the oil
and gas sector. Without these longstanding working relationships, the
Company would not have had credible substance and a track record
necessary to be taken seriously in the very competitive international
LNG market. In recognition of this fact and the exclusivity granted the
Company in relation to the executive management team developing
an offshore LNG import facility for Ireland, the Nonexecutive Directors
approved a related party transaction whereby the aforementioned
would receive performance incentives, through their wholly owned
service company Hamilton Fox Holdings Ltd., comprising of up to a
maximum of 20% of the issued share capital of PLIL split into four
separate tranches each of 5%. Performance Conditions for allotment
of each tranche of 5% are defined as the signing of Collaboration
Agreements in each case between PLIL and bona fide international
entities in the downstream LNG and gas infrastructure and distribution
business. Allotment of the final 5% tranche is conditional on a Financial
Investment Decision (“FID”) being made in respect of developing an
LNG import facility for Ireland. In order to maintain good governance,
the two Nonexecutive Directors of Predator Oil & Gas Holdings Plc
were appointed to the Board of PLIL to assure a casting vote in all PLIL
Board decisions involving any perceived conflicts of interest.
PLIL is continuing to develop an offshore LNG import solution for
Ireland based on nonshale gas LNG feedstock and which is
compatible with the reported comments of the European
Commission in relation to expanding the role of gas in green finance
by defining it as a “sustainable” source of energy.
The change in the Irish government’s future energy policy during this
period, as reflected in the proposed Climate Bill, has shifted the focus
away from traditional and historical offshore oil and gas exploration
in favour of a reliance on a renewable energy strategy. The Kinsale
gas field has now ceased production, whilst the Corrib gas field
continues to decline at a significant rate. With the change in
government policy no new gas fields are likely to be developed
offshore Ireland in the foreseeable future. Ultimately and inexorably
Ireland will become wholly dependent on gas through the UK
interconnectors for security of gas supply. Any interruption to supply
whether political, operational or through a form of natural disaster
would result in an inability to supply flexible “on demand” energy.
In this context the Company executed confidentiality agreements
with two leading international companies in the LNG business to
develop an offshore engineering solution for LNG facilities and LNG
supply to allow for the import of LNG into Ireland using a Floating
Storage and Regasification Unit (“FSRU”).
The preliminary design concept has been completed and costed for
delivery of between 250 to 275 mm cfgpd to the Irish gas market from
late 2024, subject to all regulatory consents being granted. A source
of potential financing has been identified for this element of the
project, which represents by far the largest component of all capital
costs.
PLIL is applying for an LNG import licence and, in order to optimise
the commercial conditions for the financing of the project, PLIL is also
seeking an exemption from rights of third party access (“rTPA”).
At the end of the year the Company is reviewing the opportunity of
making a submission to the Public Consultation on the expert
advisory group report entitled “Expanding Ireland’s Marine Protected
Area Network”, published by the Department of Housing, Local
Government and Heritage. Deadline for submissions is 30 July 2021.
This is likely to be in conjunction with the Company applying for
Marine Area Consent for the FSRU project as part of conforming to
new regulations put in place to replace some of the complicated
existing regulations that do not allow for security of energy supply to
be an important consideration.
The purpose of the submissions and applications would be to
demonstrate that the FSRU and LNG project is very much in the public
interest, as it is the only viable nearterm offshore solution actively
being worked on to address diversity and security of gas supply with
gas storage options. Security of energy supply is accepted by
regulators as being of public interest.
PLIL continues to develop its niche position for offshore LNG import
and is making excellent progress on raising regulatory awareness of
the above substantive strategic issues to ensure that its FSRU LNG
project remains the only viable engineering and commercial option
to potentially contribute to Ireland’s security of energy supply by the
end of 2024. Of particular relevance is the fact that the FSRU LNG
import design concept involves no new infrastructure but utilises the
existing Inch terminal and subsea Kinsale gas pipeline. Importantly
there will be no shiptoship transfer of LNG product offshore Ireland
and therefore the unique design concept developed for Ireland will
operate with the minimum possible ecological and environmental
footprint, reducing and potentially eliminating CO2 emissions from
its operation, for which currently there is no obvious competitor even
amongst onshore renewable energy projects.
In addition to being one of the few European countries lacking an LNG
import facility, Ireland also lacks any gas storage capacity. The
Company therefore continues to work to meet the criteria required
by the regulatory authorities, including financial substance, to seek
to secure a successor authorisation for our Ram Head gas storage
conceptual project off Cork in the Celtic Sea. Based on the Company’s
previous third party reservoir engineering studies, Ram Head offers
opportunities to store gas in reservoirs with potentially high gas
withdrawal rates suited for supplying “peak demand” for gasfired
backup electricity generation required by data centres when the
wind does not blow. The commercial case for developing storage
capacity at Ram Head is underpinned by the fact that it is an
undeveloped gas field that has been left fallow without further
activity for some 35 years since first discovered by then Kinsaleowner
Marathon Oil (along with some members of the Company’s executive
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management team), despite the more recent demand for gas in
Ireland. SLR Consulting (Ireland) Ltd has previously indicated in their
Competent Persons Report that gas resources could potentially be
larger than those proven for the Corrib gas field. This makes Ram Head
the ideal candidate for the development of gas storage based on initial
sale of gas to create storage capacity to support the equity component
of development costs, and the security of a large volume of
undeveloped cushion gas available to address security of gas supply
and to provide security for debt finance for a storage development.
2021 is possibly a pivotal year for the Company in terms of production
income from Trinidad and the high impact of any drilling success in
Morocco. These factors could potentially very much enhance the
Company’s financial credentials to finally secure the Ram Head
successor authorisation.
FINANCIAL REVIEW
The Company reported an operating loss for the period to
31 December 2020 of £1,689,521 (£1,279,243 for the period to
31 December 2019). The increase in operating loss is largely
attributable to an increase in finance expense to £225,359 (£74,791
for the period to 31 December 2019) as a result of expenses related
to the conversion and repayment in full of the principal amount
outstanding of the Arato Convertible Loan Notes and to increased
operating activity related to costs incurred attributable to installing,
commissioning and operating the Company’s pilot CO2 EOR project
in the InnissTrinity field onshore Trinidad.
Administrative expenses for the period to 31 December 2020 were
£1,464,162 (£1,204,464 for the period to 31 December 2019) and
include £202,424 (£93,461 for the period to 31 December 2029) fair
value adjustment to share options and warrants. Executive directors’
fees have increased to £161,000 (£144,000 for the period to
31 December 2019) as a result of the significant increase in the
Company’s corporate activities in the period to 31 December 2020 to
maintain business growth in preparation for the anticipated rebound
in global economic activity, energy demand and commodity prices in
2021 and the strengthening of ESG credentials to attract future green
energy investors.
The Company is finishing the reporting period with cash reserves of
£1,325,751 (£109,716) for the period to 31 December 2019) and
restricted cash of USD1,500,000 (USD1,500,000 for the period ended
31 December 2019) in the form of the security deposit for the Guercif
Bank Guarantee in favour of ONHYM. The balance outstanding of the
loan by the Company to FRAM Exploration Trinidad Ltd. for the
investment in the Pilot CO2 EOR Project was £468,000 (£201,000 for
the period to 31 December 2019) at the end of the period.
During the period to 31 December 2020 we have completed two over
subscribed Placings to raise £4.008 million (before expenses). Novum
Securities and Optiva Securities acting as Joint Brokers and placing
agents to the Company placed 89,000,000 new ordinary shares of no
par value in the Company at a placing price of 4 pence to raise
£3.56 million (before expenses). In addition to the Placing Shares and
in order to maximise cash resources the Company issued to Brokers,
subject to approval given at a General Meeting convened by the
Company on 25 March 2020, 4,875,000 new ordinary shares of no par
value in settlement of placing fees together with warrants over
4,450,000 new ordinary shares at 4p per share expiring on
28 February 2023.
Novum Securities acting as sole Broker and placing agent to the
Company subsequently placed 22,438,842 new ordinary shares of no
par value in the Company at a placing price of 2 pence to raise
£0.448 million (before expenses).
The Company also issued 15,192,506 shares to repay £269,000 of the
outstanding principal balance on the Arato Convertible Loan Note
inclusive of 5% conversion fee for the amount of the Loan Note being
converted.
Some Placing funds were used for redemption in full of the
outstanding principal balance on the Arato Convertible Loan Notes of
£746,000 (£ nil for the period to 31 December 2020) and the
remainder of the Placing funds are to provide the working capital to
fully fund the Company’s planned operations in Morocco and Trinidad.
As a result of these transactions 131,506,348 new shares have been
issued and the issued share capital increased to 239,678,517 by the
end of the period to 31 December 2020.
Following the transactions successfully concluded during the period
under review, the Company is wellcapitalised to fund its drilling and
production activities in Morocco and Trinidad and is free of debt.
Prudent levels of administrative and operating expenditures are
necessary to maintain the acceleration of the Company’s long
established business development strategy to a greener energy
business. This is based on expanding the pragmatic role of gas as a
“sustainable” source of energy for reducing CO2 emissions, future
collaboration with renewable energy project developers, and
utilisation of existing infrastructure to determine a common route
to achieve a timely and socially just energy transition. Attracting
investment in the energy sector will now inevitably require being
able to show a practical commitment to the requirement for
sustainability and the Company must therefore ensure that its level
of spending is adequate for this purpose to maintain its competitive
advantage.
COVID19
The Company has taken all commensurate steps to minimise
unnecessary capital expenditures and operating costs whilst COVID19
restrictions continue to impact the industry’s business operations
worldwide. It is likely that international travel restrictions will remain
in force during 2021, posing a more complex logistical challenge to
moving essential oil field personnel across international borders. The
Company believes that this is manageable in its case and should not
pose a significant impediment to executing its planned operations
during 2021.
Maintaining adequate cash reserves, protecting future production
from CO2 EOR operations in Trinidad, and securing a high impact risk
reward proposition in Morocco for our shareholders, together with
maintaining responsible management of our mature portfolio of
separate and diverse businesses focussed on climate change
awareness and reducing CO2 emissions, has been essential for
navigating the Company through the COVID19 pandemic and for
ensuring a springboard to future appreciation of shareholder value at
the earliest practical opportunity.
BREXIT
The longerterm outcome to the completion of Brexit in 2021 may still
pose new challenges in terms of creating continuing instability in the
financial and currency markets, increasing bureaucracy for importing
oil field equipment and services from the EU, and in creating
conditions liable to weaken investor sentiment and decisionmaking
processes. The Company has some protection in that it does not
operate in the UK and is intending to generate revenues in United
States Dollars, which has traditionally been a more stable currency
for business, from production in Trinidad. Accordingly, the Company
always maintains the majority of its cash reserves in United States
Dollars.
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Group Strategic Report
for the year ended 31 December 2020 (continued)
BOARD CHANGES
At the Company’s GM held on 29 June 2020, our interim chairman
Carl Kindinger retired from the Board. Dr Stephen Staley was
appointed permanent Nonexecutive Chairman.
power generation (approximately 4,800 MW) is from carbon intensive
coal and oil, which contributed materially to Morocco’s C02 emissions
of 1.68tC02/capita in 2018. Switching to sustainable gas is estimated
to cut annual C02 emissions by up to 49%.
Louis Castro was appointed as Nonexecutive Director on 14 July 2020.
In addition to restoring the balance of the Board from the governance
perspective, Louis has 30 years in the industry and the City and was most
recently Chief Finance Officer at Eland Oil and Gas plc. He has worked
in corporate finance and the capital markets in diverse geographic areas
from the UK to the Far East, South America and Africa, including the
execution of complex M & A transactions from initiation through due
diligence to negotiating and financing.
Louis is experienced in audit, tax and financial analysis and strategic
planning and marketing and has chaired audit committees and
in several public
remuneration and nomination committees
companies, where he has also advised on corporate governance. He
is a Fellow of the Institute of Chartered Accountants and formerly a
London Stock Exchange Nominated Advisor,
including FCA
registrations.
ESG METRICS
ESG is fundamental to the growth of our business and is based on
both expanding the pragmatic role of gas as a “sustainable” source
of energy for reducing CO2 emissions, future collaboration with
renewable energy project developers, and the utilisation of existing
infrastructure and subsurface reservoirs for costeffective CO2
sequestration. Through this strategy we can determine a common
route to achieve a timely and socially just, fair and equitable energy
transition.
Currently 100% of our assets are focussed on either gas, which has a
much lower carbon intensity compared to oil, or “greener” oil, where
sequestration of anthropogenic C02 can be shown to be safe and
effective for reducing C02 emissions from industrial plants currently
venting C02 into the atmosphere.
Morocco and Trinidad
Up to 33% of current C02 emissions generated by that part of the
Moroccan industry that uses fuel oil could be saved by switching to
cleaner natural gas. From 2017 to 2020 cumulative tonnes of carbon
saved by the current end users of gas versus imported fuel oil,
representing less than 20% of the easily accessible imported fuel oil
industrial market suitable for conversion to natural gas, was
approximately 200,000 metric tonnes. There is significant scope to
increase the carbon saved by expansion of the gas market in Morocco.
The Company successfully piloted 458 metric
tonnes of
anthropogenic C02 sequestrated in Trinidad in the year under review
to confirm the potential for a significant expansion of subsurface
storage of C02 in the years ahead.
Current efforts to grow the gas market in Morocco have been
hampered by lack of sufficient indigenous gas resources. The
Company’s drilling programme in Morocco is targeting material gas
resources that could potentially transform the Moroccan gas market
in a success case. The conservative option being progressed initially
by the Company is to develop compressed natural gas for the
industrial market. The anticipated dry gas from the Moroccan
reservoirs targeted for drilling will require minimal processing creating
the potential for a low carbon intensity operation forecast to be in
the order of 2.2 kg C02e /boe.
The Company’s mediumterm development options for larger gas
finds include gastopower to replace coal burned in Morocco’s
existing coalfired power stations. Approximately 85% of Morocco’s
In Trinidad for the period under review C02 sequestration operations
resulted in a net CO2 emissions reduction of 458,100 kg of CO2 relative
to producing the same volume of oil without any sequestration credit.
This strategy helps to maintain local services, jobs and communities
dependent on the oil and gas sector for their economic livelihoods to
assist with a fair, equitable and just energy transition.
Ireland
The Company’s ESG strategy for Ireland is focussed on developing an
offshore LNG import facility with reduced ecological impact compared
to onshore LNG terminals and wind farms. The ESG rationale is that
such a facility, as are found in many countries of the EU, would result
in security and diversity of energy supply, which is in the public
interest as defined by current regulatory definitions and in the context
of the energy transition.
Through the optionality of replacing 250 to 275mm cfgpd of imported
gas throughput via Ireland’s gas interconnector with the UK, ESG
transparency is being enhanced and C02 emissions potentially
reduced. The Floating Storage and Regasification Unit (“FSRU”)
proposed for Ireland by the Company will operate with the minimum
possible ecological and environmental footprint, reducing and
potentially eliminating CO2 emissions from its operation. The FSRUs
will be supplied with LNG feedstock only from transparent sources
not linked to shale gas or fracking operations. The origin of gas
currently transported through the UK interconnector to Ireland
cannot be established as clearly from an ESG perspective.
ESG performance criteria
Whilst investing in projects that contribute to reducing C02 emissions
in the countries identified by the Company as having maximum
impact per capita, there are other performance metrics that need to
be adhered to as follows:
l Where practical and pragmatic use renewable energy
(particularly solar) to power operations
–
–
Reduce carbon intensive air travel by substituting virtual
meetings aided by realtime Vsat transmission of data and
drone and camera technology for site inspections and
directing operations
Promote remote access working from home to minimise
carbon footprint with the virtual office concept
l Where operating in onshore areas, including agricultural lands
–
–
–
–
Ecological impact must be low – all produced water is
evaporated and/or treated before disposal offsite
No water discharges or oil spills from operations
Community liaison enacted to maintain local support and
understanding for those impacted by the Company’s
operations
Utilise local services wherever practical and pragmatic to
support local economies
l
An ESG Board committee is to be established in 2021 to formalise
better the substantive initial progress made in the year under
review and a new ESG policy is to be drafted to reflect the rapidly
changing business environment
–
Increase focus on social elements
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l
Sustainability Accounting Standards Board disclosure included in
FY reporting
These existing warrants have previously been factored into the fully
diluted share capital of the Company.
Future developments
The Company’s CO2 sequestration experience
in Trinidad,
management’s extensive 40 years of experience and understanding
of the gas sector, including transport infrastructure and gas storage
potential, and its ESG focussed portfolio of gas projects, creates the
opportunity for it to be a leading motivator and innovative catalyst in
the energy transition through working with others to develop greener
energy hubs in the jurisdictions where it operates. This would
integrate energy sourced from interruptible renewables and from gas
with the capability for subsurface CO2 sequestration and gas storage
(including hydrogen) in reservoirs understood by the Company. The
ability to use its inexpensive gas production for onsite micropower
generation to provide electricity to supply interruptible power to wind
farms and cheap electricity for hydrogen plants that can generate
clean fuel for local industries is a nearterm viable solution for security
and diversity of greener energy supply. CO2 generated by operations
could be combined with hydrogen for Methanisation and reuse in
micro gasfired power generation thereby forming a “closed loop” for
CO2 emissions.
POST PERIOD EVENTS
18 January 2021
The Company announced an Operations Update indicating that very
encouraging Pilot CO2 EOR results at InnissTrinity supported
commencing CO2 injection at new rates determined by the results of
the Pilot CO2 EOR Project. Maintaining these for up to twelve months
would potentially allow the Company to reach, by cumulative
monthly growth, target plateau production for the Herrera #2 Sand
in the AT4 Block in the range 243 to 547 bopd, in alignment with pre
Pilot CO2 EOR model forecasts. The prePilot CO2 EOR success
derisked CO2 EOR in Trinidad and provided the commercial,
environmental and technical model for the further expansion of
operations.
The Company also indicated that Guercif exploration well planning
was targeting a well to be drilled in Q 2 2021.
3 February 2021
The Company noted, in the context of its longstanding applications
for successor authorisations to its Corrib South and Ram Head
licensing options offshore Ireland, the renewed commitment by the
Irish Government to honour existing licences issued by the State for
oil and gas.
15 February 2021
The Company announced that the Warrant Instrument with Novum
Securities Ltd dated 15 February 2019 granting the right to subscribe
in cash for 2,000,000 ordinary shares exercisable at a price per share
equal to the subscription price (12p per share) was being amended
to allow the exercise date of the warrants to be extended by one year
to the third anniversary of the date of the Warrant Instrument.
Similarly, the Warrant Instrument with Novum Securities Ltd and
Optiva Securities Ltd dated 24 May 2018 granting the right to
subscribe in cash for 2,231,248 and 160,714 ordinary shares
respectively exercisable at a price per share equal to the subscription
price (2.8p per share) was being amended to allow the exercise date
of the warrants to be extended by one year to the fourth anniversary
of the date of the Warrant Instrument. This is in recognition of the
fact that COVID19 has played a part in extending the Company’s
original timelines for executing some of its projects.
The Warrant Instrument with Arato Global Opportunities pursuant to
the Convertible Loan Note dated 15 February 2019 granting the right
to subscribe in cash for 2,000,000 ordinary shares exercisable at a
price per share equal to the subscription price (12p per share) has
expired without the warrants being exercised resulting in a reduction
of the Company’s fully diluted share capital.
Well swab tests and investigations in the AT4 Block at InnissTrinity
confirmed the potential for realising preinjection production plateau
desktop forecasts in the range 243 547 bopd from Herrera #2 Sand.
The Company also announced that the MOU1 well pad construction
was scheduled to be prepared for April 2021.
12 March 2021
The Company announced that it had conditionally placed 17 million
new ordinary shares of nopar value in the Company at a placing price
of 10.5 pence each to raise £1,785,000 (before expenses).
Timing of the MOU1 Moroccan exploration well was reconfirmed as
being scheduled for Q2 2021. Some of the placing funds were to
provide a contingency for the increase in certain MOU1 well costs
occasioned by the 12month long COVID19 pandemic which has led
to an additional potential expense burden to remobilise services and
equipment previously immediately available in Morocco.
Further expansion of the InnissTrinity C02 EOR project was being
considered and new business development opportunities were
actively being reviewed.
Potential for developing an integrated project plan designed to help
meet security of energy supply concerns; options for CO2
sequestration; and options for backup power for data centres using
greener energy was highlighted.
The potential for utilising the Ram Head gas discovery in the Celtic
Sea, still the subject of the Company’s application for a successor
authorisation, for gas storage and security of supply, and in the longer
term for C02 sequestration, was outlined in the context of a
coordinated infrastructure project with green energy options.
17 March 2021
The Company announced that it had received an exercise notice in
respect of warrants issued pursuant to a warrant agreement with the
Company dated 24 May 2018 (in connection with the Placing carried
out by the Company in May 2018 on admission of the Company to
the Official List (standard listing segment) of the London Stock
Exchange’s main market for listed securities) to subscribe for 267,750
new shares of no par value each in the Company at 2.8p per share
following receipt of the aggregate £7,497 subscription price.
18 March 2021
The Company announced scoping development and operating costs
for a Pilot Compressed Natural Gas (“CNG”) Project at Guercif in
Morocco based on a 10 mm cfgpd profile for 10 years, net scoping
and provisional capital costs to the Company of £8.2 to 8.6 million
and estimated operating costs of US$2.79 to 4.24/mcf with an
example netback of US$7.21/mcf after taxes based on a sales price
to the Moroccan industrial market in the range of US$ 10 to 12/mcf.
In the context of the Company’s Floating Storage and Regasification
Unit (“FSRU”) and LNG project offshore Ireland, the Company
announced that it is making a submission to the Public Consultation
on the expert advisory group report entitled “Expanding Ireland’s
Marine Protected Area Network”, published by the Department of
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During a year where the financial markets have been dominated by
the impact of COVID19 and commodity prices in our sector have
fallen, we have eliminated debt and maintained adequate cash
resources to continue to advance our operations and business
development strategies in pursuit of attempting to achieve our near
term goals in a timely and costeffective manner.
I would like to thank my fellow directors, our shareholders, our
advisors and service providers, and our consultants in Trinidad,
Morocco and Ireland for their continued and unwavering support of
the Company through the COVID19 crisis despite the impact of
COVID19 on all our lives. I also look forward to a brighter outlook
over the next 12 months where the sacrifices made and firm
foundations built in 2020 can be repaid through continuing successful
application of the Company’s business ethos and the creation of
shareholder and stakeholder value.
Paul Griffiths
Chief Executive Officer
27 May, 2021
Group Strategic Report
for the year ended 31 December 2020 (continued)
Housing, Local Government and Heritage. Deadline for submissions
is 30 July 2021. This will be in conjunction with the Company applying
for Marine Area Consent for the FSRU project.
25 March 2021
The Company announced that further to its announcement of
12 March 2021, it did not have sufficient headroom shares to enable
the issue and admission of all of the 17,000,000 Placing Shares which
are required to be issued pursuant to the Placing without the
production of an FCA approved prospectus. The Company is therefore
issuing 5,215,155 new ordinary shares (up to its existing headroom)
and for a director, Paul Griffiths, to make up the shortfall with a
transfer of 11,784,845 existing shares held by him to Novum
Securities.
When the Company has the ability to issue further shares it intends
to issue Paul Griffiths 11,784,845 new Ordinary Shares and will take
all necessary steps required in order to make the necessary listing and
admission hearing applications. This will put Paul Griffiths back into
the position that existed, in terms of his aggregate shareholding in
the Company, had he not made the transfer of Ordinary Shares. For
the avoidance of doubt the transfer of shares to Novum Securities Ltd
from Paul Griffiths involves no consideration being paid to Paul
Griffiths.
SUMMARY
During the period, despite the global impact of the COVID19
pandemic, we have reached an important milestone in successfully
executing and operating the InnissTrinity pilot C02 project and
derisking our business strategy based on reducing C02 emissions by
facilitating C02 sequestration. With the emphasis now firmly on ESG
and demonstrating energy sustainability, we are pleased to be able
to provide a practical and pragmatic option for green energy finance
from investors cognisant of their role in helping to ameliorate the
effects of climate change whilst maintaining a fair, equitable and just
social responsibility through the transition to green energy.
In Morocco we completed a significant part of the well planning for
the MOU1 exploration well at Guercif before COVID19 restrictions
forced national lockdowns and curtailed international travel. As a
result, we were able to maintain a drillready status in preparation
for the resumption of operations when COVID19 restrictions are
relaxed. The forced temporary postponement of drilling operations
allowed us time to develop a new additional target for the MOU1
well with which to upgrade audited prospective gas resources by 92%
for primary Tertiary reservoir objectives. Further gas prospects were
also matured for followup drilling. In addition, we built a technical
and commercial case for compressed natural gas at Guercif to supply
Morocco’s industrial market, thereby paving the way for an early
declaration of commerciality subject to successful drilling results.
In Ireland we have developed a technical and commercial solution for
an LNG import facility that has reduced ecological impact relative to
other onshore projects, including wind farms, provides security and
diversity of gas supply, and provides greater ESG and sustainability
transparency relative to a simple reliance on imported pipeline gas
from the UK infrastructure. Importantly capital investment costs are
manageable, and a potential source of financing has already been
identified. There is no other similar offshore project in Ireland that
currently can be operational by the end of 2024 and has the ability
to meet increased gas demand at peak times. By the end of the
reporting period concerns regarding the issue of security of gas supply
have begun to come to the forefront in media coverage of the energy
industry in Ireland.
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Key Performance Indicators
Debt has been eliminated during the reporting year and an
adequate quantum of equity funding has been secured to
maintain sufficient working capital as we transition to a revenue
generating Group through a potential period of low commodity
prices and the impact of COVID19. Shareholders’ interests are
best protected by establishing sufficient liquidity to support
going concern criteria during periods of adverse global market
conditions.
l
The rate of utilisation of the Group’s cash resources. This
measures our ability to plan expenditure and conserve cash to
ensure a going concern and is addressed by reducing corporate
costs and operating costs whenever and wherever prudent to do
so, without impacting the timely execution of the Group’s
business development strategy, and by not entering into any
discretionary new commitments and liabilities.
The Group has successfully achieved its performance indicator during
the reporting year by increasing liquidity, delivering enhanced oil
production from the pilot C02 EOR project in Trinidad, and
maintaining a “drillready status” in Morocco without incurring any
financial liabilities.
At this stage in the Group’s development, the Directors do not
consider that standard industry key performance indicators are
relevant. The Group currently estimates that during 2020 it has
accumulated cumulative enhanced oil production from its initial pilot
CO2 EOR activities in the InnissTrinity field onshore Trinidad of 2,928
barrels of oil. The Group does not expect to report profits until
extraction costs and various other deductions are mutually agreed
between POGT and FRAM Exploration Trinidad Ltd. as C02 EOR
operations are scaled up during 2021. The main KPI is therefore
considered to be the conservation and prudent deployment of cash
and the contribution to reducing C02 emissions whilst the Group
continues to undertake appropriate exploration activity as described
as follows:
l
Improving ESG and Sustainability in relation to the Group’s
operations
The Group has sequestrated 458 metric tonnes (458,000 kg) of
anthropogenic C02 that would otherwise had been vented into
the atmosphere from one of Trinidad’s several ammonia plants.
l
Expand total prospective, probable and proven resources and
reserves.
These measure our ability to increase predrill prospective
resources, discover and develop reserves, including through the
acquisition of new licences or assets.
increased
During the year under review new studies
independently audited prospective gas resources for the primary
Tertiary reservoirs in the Guercif Licence by 92%.
Enhanced oil production from the pilot C02 EOR operations in
the InnissTrinity field has derisked the “pending development”
recoverable resources classification of the AT4 Block within the
InnissTrinity field in respect of the 459,000 barrels of oil in the
Herrera #2 Sand, from the production of which the Company is
entitled to a 50% share of profits.
l
Develop oil and gas projects which will result in positive cash flow
within a short time horizon.
This measures our ability to assist the internal funding of projects
with medium term time horizons, as demonstrated by our
continued funding of the development of a CO2 EOR project in
the proposed Compressed Natural Gas
Trinidad and
development option for future discovered gas in Guercif to
support early monetisation of gas and to significantly reduce the
quantum of development capital required.
l
Enter into valueadding joint venture and farmout transactions.
This measures our ability to mitigate risk, share capital
expenditure with partners and assist in meeting licence
commitments.
This objective is as yet only partially realised with the entering
into of a confidentiality agreement with a specialist FSRU vessel
owner to work together to develop an offshore LNG import
facility solution for Ireland. Financing of the project would be
largely provided by the FSRU owner if an FID decision were to be
reached.
l
Secure funding that minimises, as far as market conditions allow,
shareholder dilution, cognisant of the potential for a judicious
level of debt funding. This measures our ability to enhance
shareholder value whilst securing the means to grow the
business without unduly increasing risk.
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Group Structure and List of Assets
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Onshore Trinidad InnissTrinity CO2 sequestration funded by enhanced oil recovery
Background to the InnissTrinity field and CO2 EOR project
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Group Structure and List of Assets (continued)
The producing InnissTrinity oil field (“InnissTrinity”) is located in the
Southern Basin within onshore Trinidad’s largest oil province,
approximately 10 km southeast of the BarrackporePenal oil field and
approximately 75 km south of the capital Port of Spain.
The InnissTrinity Licence is held by the State company Heritage Oil
Trinidad Ltd (“Heritage”), formerly Petrotrin, and covers an area of
23.35 km².
It is operated under an Incremental Production Services Contract
(“IPSC”) by FRAM Exploration Trinidad Ltd. (“FRAM”), a wholly owned
subsidiary of Bahamas Petroleum Plc after the acquisition of
Columbus Energy Resources Plc during 2020. The term of the IPSC
was extended to 31 December 2021 as a result of the Company’s pilot
carbon dioxide enhanced oil recovery (“CO2 EOR”) project, which
provided the work programme for FRAM to extend further the IPSC.
The outstanding FRAM drilling commitment of 7 wells was replaced
by the Company’s CO2 EOR Pilot Project, giving the Company
substantial negotiating leverage as the IPSC is now dependent on the
Company’s exclusive provision of CO2 EOR services. Positive results
from the pilot CO2 EOR during the year under review have formed
the basis for implementing the next stage of CO2 EOR operations
which will be the basis for extending further the IPSC. Heritage and
the Ministry of Energy and Energy Industries (“MEEI”) now require
secondary recovery techniques (including CO2 EOR) to be a key
element of any work programme required to extend existing IPSC’s.
Under the IPSC there are currently 86 wells operated by FRAM of
which many, but not all, may be suitable for CO2 EOR operations
based on previous production history and downhole well integrity.
The pilot CO2 EOR project operated by the Company is focussed on a
fault compartment 0.268 km² in size within the InnissTrinity field,
designated the “AT4 Block”, and containing 11 wells. The Herrera #2
sand, a deep water turbidite, is one of five producing sands within
the AT4 Block that has been selected for initial pilot CO2 EOR
operations. This interval has been isolated for CO2 injection in the
AT5X well by the Company to facilitate focussed and confined
injection of CO2 to evaluate reservoir pressure buildup, vertical and
lateral communication between reservoirs and offset wells, and to
facilitate the interpretation and calibration of realtime pressure data
transmitted by the Company’s secure Vsat communication links. The
Herrera #2 Sand has the lowest primary recovery factor of all the
producing Herrera Sands in the AT4 Block and the largest volume of
original oil in place currently undeveloped. CO2 EOR is anticipated to
have greater sweep efficiency compared to waterflood due to CO2’s
ability to lower the viscosity of oil, making it more mobile.
The Company’s independent Competent Persons Report (“CPR”)
indicated Texaco’s estimate of OIIP in the InnissTrinity field, covering
an area of 2.35 km² was 67.95 mmbo, of which it is estimated that
22.768 mmbo have been produced up to 30 April 2016. The CPR
indicates that this figure is now revised upwards based on an increase
in area to 2.53 km² and a better understanding of contributing net
pay (approximately 140 feet for all the five Herrera producing sands)
based on a long production history. OIIP is now estimated to be
89 mmbo with cumulative production of about 23 mmbo. Gross
contingent CO2 EOR oil resources are in the range 5.3 (low estimate)
to 8.9 mmbo (high estimate) and are classified as “pending
development”. It is noted that these incremental CO2 EOR recoveries
can be reclassified as reserves after a favourable production
response from the Herrera Sands, as was achieved during the
reporting year (see below). Whilst the reserves are not attributable
to the Company, who do not hold a licence interest in order to
minimise liabilities and obligations under the IPSC, they are significant
for evaluating potential upside profits from the Company’s
commercial arrangements with the IPSC operator FRAM.
Commercial arrangements with FRAM AND Massy Gas Products
Trinidad Ltd
Through its whollyowned subsidiary, Predator Oil & Gas Trinidad Ltd
(“POGT”), the Company currently holds an interest in a Well
Participation Agreement (“WPA”) signed with FRAM on 17 November
2017 and relating to the Company’s entitlement to profits derived
from its investment in the producing InnissTrinity field.
The IPSC allows for FRAM to invest in InnissTrinity by satisfying
certain annual infill drilling commitments during the life of the IPSC.
In return, FRAM receives 100% of the benefits of all incremental
production achieved through the investment relative to the base
line production established for the field prior to the investment
being made. FRAM’s net incremental production revenues are after
deduction of operating costs and certain royalties and taxes.
Historical tax losses accumulated within FRAM are available for
offset against Petroleum Profits Tax on operating profits. There is
a 20% investment credit for capital items purchased for CO2 EOR
operations which can be offset against 18% Supplemental
Petroleum Profit Tax (“SPPT”) where applied when the price of
West Texas Intermediate crude is between US$50.01/bbl and
US$90.00/bbl. During the year SPPT for CO2 EOR operations was
reduced to 14.4% and the threshold for paying SPPT was raised to
a WTI spot price of US$75. The relief granted for offsetting
historical cumulative tax losses against operating profits was
restricted to 75% of operating profits. This was mainly directed at
the capitalintensive LNG industry.
Under the WPA, POGT is entitled to a portion of all profits generated
from incremental enhanced oil production attributable to CO2 EOR
operations under the same commercial terms pertaining to the IPSC
as are currently applicable to FRAM. Under the specific commercial
terms of the WPA negotiated by POGT with FRAM, POGT has capped
operating costs at US$10/bbl and will also benefit from offsetting
FRAM’s cumulative tax losses against 50% PPT. POGT is not a partner
in the IPSC and therefore has no exposure to any of the FRAM
commitments and liabilities relating to the IPSC. POGT will receive
100% of all operating profits until payback of its agreed investment
of US$1.5 million in CO2 EOR operations. Thereafter aftertax
operating profits will be split 50:50 between POGT and FRAM. Under
the WPA, POGT also had an option up to 30 September 2020 to
acquire FRAM for an agreed sum of US$4.2 million.
During the year under review POGT reached its agreed investment of
US$1.5 million in the CO2 EOR pilot project in InnissTrinity. POGT
elected not to execute its option to acquire FRAM, preferring not to
take on additional commitments and liabilities under the IPSC but to
conserve cash and prevent potential shareholder dilution at a time
when COVID19 was continuing to impact negatively the financial and
equity markets. The Board was of the opinion that the success of the
pilot CO2 EOR project (see below), the dependence of the IPSC work
programme on the Company providing CO2 EOR technical services
and CO2 supply (see below) and the public recognition by the MEEI
and Heritage of the Company’s success by approving the next stage
of POGT’s CO2 EOR project plan created sufficient negotiating
leverage to ensure the Company was wellposition to realise its
commercial objectives for minimum exposure to potentially onerous
IPSC liabilities.
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To further the initiation and continuance of CO2 EOR operations in
InnissTrinity, a Heads of Agreement for CO2 Gas Sales (“CO2 HOA”)
was entered into with the only incountry CO2 supplier, Massy Gas
Products Trinidad Ltd (“MASSY”). This is of surplus, currently collected
from one of Trinidad’s several ammonia plants that presently vent CO2
to the atmosphere. The CO2 HOA is based on a minimum scoping daily
delivery of up to 60 Mt CO2 if required, depending on surplus
quantities available. Supplemental Agreement No.7 dated
30 September 2020 extended the Exclusivity Period given under the
terms of the CO2 HOA until 31 March 2022. Massy
is a
multiconglomerate with a market capitalisation of approximately
US$1.5 billion. The Company and Massy were referenced in the
context of CO2 EOR in the influential “Energy Now” (Issue
34 December 2020) by the Energy Chamber of Trinidad and Tobago.
Pilot CO2 EOR results
During the year under review approval was received from the MEEI
and Heritage to install, commission and test the Company’s CO2
delivery system at InnissTrinity. This represented the first CO2 EOR
project of its specific design in Trinidad and the first large scale CO2
EOR operation for over 25 years.
Commissioning and testing was successfully completed by injecting
a trial volume of CO2 at moderate pressures into the AT5X well,
which had been recompleted for CO2 injection into the Herrera #2
Sand. The CO2 injection system operated efficiently. Reservoir
pressure buildup was observed and no CO2 escape to the surface
was recorded.
Approval was then given by the MEEI and Heritage for a period of
continuous CO2 injection into AT5X between 18 May 2020 and
17 June 2020. During this period 400 metric tonnes (400,000 kg)
of CO2 were injected at varying daily volumes and injection
pressures from 400 to 1200 psi to determine the impact of varying
these parameters on the rate of reservoir pressure buildup in
order to find the optimum parameters for costeffective CO2 EOR
operations.
The CO2 injection system operated as forecast during this period.
Continuous reservoir pressure buildup was observed on Vsat
transmitted realtime data and no CO2 escape to the surface was
recorded by CO2 monitoring equipment.
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Group Structure and List of Assets (continued)
Following the planned cessation of C02 injection at AT5X, enhanced oil production was observed approximately one month afterwards at
monitoring well AT12 at an enhanced rate of 21.3 bopd, representing approximately a 100% increase versus base line, preinjection
production rates.
The increase in oil production was calibrated against an 84.561 psi increase in static Bottom Hole Pressure at AT5X in the Herrera #2 Sand.
Contemporaneously realtime surface pressure data, supported by changes in fluid level influenced by increased bottom hole pressures,
showed a response to CO2 injection at AT4, AT6, AT7, AT8 and AT10. 17 barrels of oil were collected at AT7 despite this well never having
previously produced oil for over two years.
At the end of the reporting year AT5X was recompleted as a producer to collect oil samples, following CO2 injection, for analysis. Oil viscosity
at AT5X had been reduced by 37.7% as a consequence of CO2 injection.
AT13 was recompleted as a CO2 injector to trial its effectiveness for that purpose versus AT5X.
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Calibration of the enhanced AT12 oil rate with the observed increase
in static bottom hole pressure in the Herrera #2 Sand at AT5X for the
volume of CO2 injected to date indicated the rate to be 69% higher
than that predicted by the prepilot reservoir engineering model.
Increasing bottom hole pressure incrementally at AT5X to 1053 psi
bottom through the next phase of continuous C02 injection is now
forecast to potentially increase enhanced oil production at AT12 to
between 142 – 192 bopd.
Based on cumulative enhanced oil production of 2,928 barrels by the
end of the year from the AT4 Block, the pilot phase of the CO2 EOR
operations proved a technical success and laid the foundations for
developing the commercial model for scaling up to continuous CO2
EOR oil production. The downhole completion with reservoir isolation
by packers for efficient containment of CO2 was successful and no
CO2 leakage to surface was monitored. This confirmed the CO2
sequestration potential in reservoirs that were compartmentalised
and sealed laterally against faults and vertically by shales despite
injecting CO2 at higher pressures than reservoir pressure.
From 18 July 2020 AT12 has continued to produce consistently at an
enhanced oil rate as a result of the sustained impact of C02 injection
even during long periods when injection had ceased (see below).
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Group Structure and List of Assets (continued)
An environmental monitoring programme has been operating with the Environmental Monitoring Authority (“EMA”) and collection of samples
is ongoing for comparison with prepilot CO2 EOR base line samples, in accordance with a Certificate of Environmental Clearance issued by
the EMA for CO2 EOR operations in InnissTrinity.
Constant monitoring of background CO2 levels is practiced together with regular site inspections to check for evidence of any impact of CO2
leakage on vegetation.
To date no incidents have been reported.
The Health and Safety Plan for CO2 EOR operations in consultation with Massy and the EMA has been enacted successfully.
No incidents have been reported to date.
The Company is focussed on using local services and personnel and reporting frequently to the regulatory authorities.
Plans have been submitted to the MEEI and Heritage for approval to start injecting CO2 continuously again in AT5X, the preferred CO2 injector
well, beginning in April 2021 and continuing throughout the year.
It is estimated that 2,750 metric tonnes (2.75 million kg) of anthropogenic CO2 will be injected, depending on operational uptime and any
evidence of CO2 absorption in produced reservoir fluids. It is estimated that by the end of 2021 the plateau production targets described
below will be reached.
Forward plan
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Production plateau guidance based on the recalibrated prepilot
reservoir engineering model is 243 to 521 bopd. The range reflects
the potential for operational downtime, variability of individual well
performance, variations in reservoir quality within the Herrera #2
Sand, and the ability, subject to investigating downhole well and
casing integrity, to add additional production wells AT6, AT7 and
AT10 and IN6 (perforating the Herrera #2 Sand required).
The Company estimates that at the maximum plateau production
level of 521 bopd being reached and maintained until the end of Q1
2022 for example and based on a constant WTI Spot Price of
US$63.56/bo, after tax undiscounted netback is estimated to be
US$27.69/bo with cumulative net after tax Company revenues of
US$2.373 million from the profit sharing arrangements under the
WPA including recovery of 100% of the Company’s investment. This
represents an IRR of 66.9%. At 120 bopd plateau production at WTI
US$59.45/bo and 243 bopd plateau production at WTI US$25/bo for
example the C02 EOR project breaks even or makes a small operating
profit respectively. A combination of low oil price and low production
rate could make the C02 operations uneconomic. The above forecasts
illustrate that there is a wide range of possible outcomes for project
economics that will only be narrowed as production data and
reservoir performance are calibrated against C02 injection volumes
during the next 12 months.
The gross firm budget for the work programme for the next
12 months is estimated to be approximately £126,000. Following
these firm expenditures C02 EOR operations are anticipated to be
funded out of the Company’s share of profits from production
revenues.
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Group Structure and List of Assets (continued)
DESCRIPTION OF ASSETS
Onshore Morocco
Onshore Morocco – Guercif Petroleum Agreement
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Background to the Guercif Project
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The Guercif Petroleum Agreement (“Guercif PA”), comprising the
Guercif Permits I, II, III and IV located in the Guercif Basin in northern
Morocco, covers an area of 7,269 km². It lies approximately 250 km
due east of and on trend with the geologically coeval Rharb Basin,
where shallow commercial gas production has been established by
SDX Energy Plc and its predecessor Circle Oil for several years. Guercif
also lies approximately 180 km due northwest of Tendrara, where
deep gas is currently being appraised and potentially developed by
Sound Energy Plc. During the year under review ConocoPhillips were
awarded contiguous licences adjoining the Company’s acreage in the
Guercif Basin (see map below).
The Guercif licence area straddles the Maghreb gas pipeline to
Europe, which also serves Morocco’s current inventory of gasfired
power plants.
is therefore wellpositioned relative to
infrastructure for the potential early monetisation of yet to be
discovered gas.
It
Through its wholly owned subsidiary Predator Gas Ventures Ltd.
(“PGVL”), the Company holds a 75% working interest in and is the
operator of the Guercif PA. ONHYM, the State oil company, holds 25%
and is carried through exploration, but funds its prorata share of all
costs upon a Declaration of Commerciality. ONHYM is owned by the
Moroccan government and is involved in oil and gas exploration,
appraisal, development and production within Morocco. In addition
to mining activities, ONHYM is the regulatory authority for all oil and
gas licences.
The Guercif PA is for 8 years and is split into an Initial Period of
30 months, commencing on 19th March 2019; a First Extension
Period of 36 months duration; and a Second Extension Period also of
30 months. After each Licence Period there is an opportunity to
withdraw from the Licence, without entering the next Licence Period.
In the Initial Period the work programme comprises 250 kilometres
of 2D seismic reprocessing and AVO analysis and the drilling of one
exploration well to a minimum depth of 2,000 metres or to the top
of the Jurassic, whichever occurs first. Desktop geological and gas
marketing studies will also be carried out. The Minimum Exploration
Commitment is US$3,458,000.
Fiscal terms and commercial opportunity
The fiscal terms in Morocco, which are some of the best in the World,
are restricted to a 5% State royalty for gas, applicable after the first
10.6 BCF of net production to the operator, and corporation tax
charged at 31%. However, there is a 10year “holiday” before
corporation tax will be charged and any unused tax losses can be
offset against the tax due. There are no signature bonuses but
production bonuses in the form of cash payments exist with a
maximum oneoff payment of US$5,000,000 on production greater
than 30,000 BOE/day. A discovery bonus of US$1,000,000 is also
payable. Significantly each individual gas field can be fiscally
ringfenced under the terms of an application for an Exploitation
Concession. Award of an Exploitation Concession is not dependent
upon fulfilling the work programme for the exploration phases of the
Guercif PA.
Gas prices for producers in Morocco are currently higher than UK
National Balancing Point (“NBP”) prices for domestic delivery. The
highest prices are paid by industrial users, substituting for expensive
carbon intensive fuel oil imports, and ranged from US$ 10 – 12/mcf
during 2020. It is this market that the Company will initially target
with trucked Compressed Natural Gas (“CNG”), which by substitution
of more carbon intensive imported fuel oil will potentially reduce CO2
emissions by up to 33%.
During the year under review an application by the Company and
ONHYM for an extension of the Initial Period of the Guercif Petroleum
Agreement to 18 September 2022 was submitted to the Ministry for
approval. The extension is to reflect the impact of the COVID19
pandemic on the postponement of normal oil and gas operations due
to national and international lockdowns in response to public
health advice.
The Company’s previous independent Competent Persons Report
(“CPR”), republished in February 2020, indicated Best Estimate and
High Estimate recoverable gross prospective gas resources for only
two prospects in the area defined by the Guercif PA in the range
632 to 1,257 BCF respectively. These are for a Tertiary Prospect, now
defined as the “MOU2 Prospect”, and a Triassic prospect with
reservoir objectives equivalent to the TAGI of the Tendrara
appraised gas discoveries and the producing Meskala gas field.
During the year under review an additional Tertiary gas prospect
was matured, defined as the “MOU4 Prospect” (see map). The
results of a CPR by SLR Consulting (Ireland) Ltd were announced in
December. Best Estimate and High Estimate recoverable gross
prospective gas resources for only the MOU4 Prospect were in the
range 393 to 944 BCF respectively, reflecting a 92% increase in gross
prospective Best Estimate Tertiary gas resources. The proposed
MOU1 exploration well (see below) is designed to test the section
with gas shows in GRF1, 1.7 kilometres to the southeast. It will also
test the MOU2 and MOU4 prospects at the distal limits of
maximum closure.
History of exploration in Guercif
Guercif has been very lightly explored with only 4 deep exploration
wells drilled by Elf in 1972 (GRF1), Phillips in 1979 (TAF1X), ONAREP
(the forerunner of ONHYM) in 1985 and 1986 (MSD1 and KDH1)
and 2 shallow stratigraphic wells drilled by BRPM for coal exploration
in the 1950s.
TransAtlantic reentered, logged and tested the MSD1 well, originally
drilled in 1985, in 2008 but the logging and testing failed to establish
the presence of hydrocarbons in the Jurassic.
The seismic inventory includes 3,291 kilometres of 2D seismic data
acquired between 1968 and 2003, including a new 300kilometre
ONAREP 2D seismic survey acquired in 2003, which were reprocessed
in 2006 by TransAtlantic when PreStack Time Migration was applied
for the first time to the seismic inventory. TransAtlantic also acquired
an aeromagnetic and aerogravity survey in 2006, comprising 10,000
line kilometres.
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Group Structure and List of Assets (continued)
Historical exploration focus was entirely on the Jurassic and was
completed before the shift in emphasis took place that resulted in
shallow (Tertiary) gas production in the Rharb Basin and successful
deep (Triassic) gas appraisal drilling at Tendrara.
–
–
Dry gas shows in the equivalent section 1.7 kilometres to the
southeast in GRF1 (drilled in 1972)
Evidence for thermogenic dry gas in soil samples northwest of
GRF1
In this context therefore Guercif has never attracted new exploration
to evaluate the Tertiary targets encountered in the gas producing
Rharb Basin and the offshore gas discovery well Anchois1. Recently
published new academic research (Capella et. al. 2017) confirmed for
the first time the geological continuity of the section containing the
producing Miocene (equivalent to the Tortonian Hoot and Guebbas
formations) gas reservoirs in Rharb Basin with geological outcrops in
the Guercif Basin. During the year under review ConocoPhillips were
awarded licences contiguous to those of the Company. PGVL’s well
established “first mover” strategy was reinforced with the growing
appreciation of the hydrocarbon potential of the previously over
looked Guercif Basin and its contiguous area to the west.
MOU1 Prospect
The Company has picked the MOU1 Prospect from its extensive
inventory of prospects, on the basis of it having the lowest risk of
finding dry gas with sufficient potential volumes to meet its threshold
for early monetisation through a simplified commercial gas
development. The MOU1 well will also test the limits of closure for
the upside cases for gross recoverable prospective gas resources for
the MOU2 and MOU4 prospects.
The MOU1 well has multiple potential reservoir objectives:
–
–
–
Sands equivalent to the upper Guebbas of the Rharb Basin
(TGB3 and TGB4 PGVL nomenclature)
Sands equivalent to the lower Guebbas of the Rharb Basin
(TGB2 PGVL nomenclature)
Sands equivalent to the lower Hoot of the Rharb Basin (TGB2A
PGVL nomenclature)
The above reservoir objectives are prognosed to occur between 1,000
and 1,500 metres drilling depth. Below 1,500 metres to the planned
total depth of the well at 2,000 metres (or top Jurassic, whichever
occurs first) there are additional potential reservoir objectives:
–
–
Sands equivalent to those encountered in SDX Energy’s LMS2
well in the Rharb Basin (“onlap surface” PGVL nomenclature) –
SDX to flowtest in Q4 2021, after operational delays due to
COVID19 in 2020.
Basal reservoirs on top of the Jurassic equivalent to those gas
bearing on logs in offset well GRF1 (Red Beds or TGB1a PGVL
nomenclature)
The TGB2 reservoir objective is considered to have the highest
chance of finding gas (very conservatively estimated at 34% by SLR
Consulting (Ireland) Ltd.s CPR) given:
–
Seismic amplitude brightening (seismic line 84 GR 05 below) that
conforms to structural closure
During the year under review the draft geological and drilling
programmes for the MOU1 well were completed. Regulatory
approval for the Environmental Impact Assessment was received and
ONHYM approved the MOU1 well budget and well location.
Well planning progressed with the receipt of most of the bids for well
services and logistical support. A site visit to the drilling location was
made and to the Star Valley Rig 101 on location in the Rharb Basin
for SDX Energy (see above).
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The MOU1 well preliminary surface coordinates were surveyed in together with the location of the 1972 GRF1 well for reference. The possible
routes for mobilising the Star Valley rig to Guercif from the Rharb Basin were investigated (see below).
During Q1 2020 incountry field operations were required to be deferred due to the COVID19 pandemic which introduced public health restrictions,
national lockdowns and restrictions to international travel.
The MOU1 reservoir targets are shown below together with the well’s structural relationship to the GRF1 well.
Houstonbased NuTech’s modern petrophysical study of the GRF1
well had determined that the gross interval (equivalent to the lower
Hoot sand, or TGB2a) between 1,386 and 1,413 metres TVD KB
(27 metres) had up to 16.2% porosity and interpreted gas saturations
in the range 37 to 51%. This interval is a new additional deeper gas
target for the MOU1 well at approximately 1,400 metres drilling
depth. MOU1 will create an opportunity to evaluate the extreme
western edge of the MOU4 Prospect.
A gross interval between 1,635 and 1,925 metres TVD KB (290 metres)
had gas saturations ranging from 30 to 77%. The NuTech petrophysical
analysis supports the possibility of GRF1 being mislocated on old
1972 seismic in a gaswater transition zone downdip from an updip
gasbearing structure.
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Group Structure and List of Assets (continued)
The location of the proposed MOU1 well to the MOU4 Prospect for the TGB2A (Hoot) objective is shown below (Best and High Estimate
gross prospective recoverable gas resources of 393 and 944 BCF respectively).
The location of the proposed MOU1 well to the MOU2 Prospect for the TGB3 and TGB4 (Guebbas) reservoir objectives is shown below (Best
and High Estimate gross prospective recoverable gas resources of 426 and 879 BCF respectively).
Preparations for commencing MOU1 well operations in Q2 2021 will
be progressed as COVID19 restrictions become manageable. It is
anticipated that the MOU1 well could take up to 30 days to drill but
the well is likely to reach total depth significantly earlier based on
current projections (20 days or less).
The Star Valley Rig 101 will be mobilised from the Rharb Basin after
completing up to three analogous wells for SDX Energy.
If warranted, rigless testing will be performed and, depending on
results, appraisal drilling may be approved for Q4 2021 in order to
fasttrack an early gas development in 2022 for the Compressed
Natural Gas market.
The gross budget estimate for 2021 expenditures is currently
£2,132,223.
Forward Work Programme
Offshore Ireland – Floating Storage and Regasification Unit (“FSRU”)
The Company’s Energy Transition Roadmap (see below) for Ireland is
focussed on utilising a technological solution for offshore LNG imports
to satisfy security and diversity of energy supply. It is based on gas
being compatible with the reported comments of the European
Commission in relation to expanding the role of gas in green finance
by defining it as a “sustainable” source of energy. The FSRU solution
proposed would not use LNG sourced from fracked gas, has a much
reduced ecological and environmental footprint compared to other
onshore energy projects (including renewables), and the potential to
reduce and potentially eliminate CO2 emissions from its operation.
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As can be seen from the illustration below, forecasting Irish GHG Emissions by sector share in the years 2020 to 2030, a presumed reduction
in fossil fuel use in the Energy Industries, Residential and Commercial sectors is exceeded by emissions increasing from the Industrial Processes,
Manufacturing Combustion and Agricultural Sectors. It serves to emphasise that no single sector of the economy should be singled out in the
context of climate change concerns, rather it requires a collaborative effort for a just, equitable and socially fair energy transition that avoids
“economic shocks” that invariably are absorbed preferentially by the vulnerable in society.
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Group Structure and List of Assets (continued)
The Predator FSRU concept has a pivotal role to play in developing the strategy of the Energy Transition Roadmap (see above) towards 2030
and beyond, based on collaboration between different sectors (wind power, natural gas and hydrogen storage, C02 sequestration and hydrogen
production) to maximise the use of existing infrastructure to develop commercially viable and financeable “green energy hubs”.
During the year under review Irish government energy policy has
shifted inexorably towards promoting renewable energy (particularly
wind power) in order to cut high levels per capita of C02 emissions
and move towards green energy dominance and net zero C02
emissions by 2050.
As can be seen from the above Forecast Single Electricity Market
(“SEM”) thermal generation mix and interconnection electricity
capacity (Source: Gas Networks Ireland Network Development Plan
2020), natural gas remains a critical contributor to the thermal
generation mix, at least until 2030, in order to satisfy the demand
represented by the SEM.
The decision to ban the award of new oil and gas licences and the
diminishing levels of existing indigenous gas production (with the
decommissioning of the Kinsale gas field and the natural decline of
the Corrib gas field) has ensured that Ireland becomes increasingly
dependent on imported gas through the interconnectors with the UK
(see chart below). In addition to being one of the few European
countries lacking an LNG import facility, Ireland also lacks any gas
storage capacity. As a result security and diversity of energy supply,
as required by the European Union, has been fundamentally
compromised during 2020 to the extent that a government
department “Request for Tenders dated 2 November 2020 for the
provision of Consultancy Services to undertake a Technical Analysis
to inform a Review of the Security of Energy Supply of Ireland’s
Electricity and Natural Gas Systems” tender invitation was released
by the end of the year. Some of the elements of the scope of the
Technical Analysis were defined as follows (emphasis given by the
Company in bold type):
l
l
l
l
l
l
“The timeframe covered by the Review (i.e. the period to 2030)
will cover a period of major transition of the energy systems in
Ireland, including a doubling of the electricity generated from
renewable sources (principally wind and solar) to 70% of Ireland’s
final consumption. This target was set in the Climate Action Plan
with the majority of the remaining 30% of electricity likely to be
generated from natural gas. It is imperative that, as Ireland
makes this energy transition following the phasing out of peat
and coal use for electricity generation, Ireland’s security of
electricity supply is expected to become much more dependent
on natural gas which is likely to be the principal source of non
variable generation supporting variable renewable sources such
as wind and solar;
there will be a significant reduction in indigenous supplies of
natural gas due to production at the Kinsale fields having ceased
in July 2020, and the planned tapering decline in production from
Corrib over the next decade;
Ireland’s gas import dependency is predicted to increase from
over 50% in 2019 to circa 80% by the middle of the decade and
to over 90% import dependency by 2030;
all of Ireland’s natural gas imports are sourced (via the two
pipelines) from a single supply point at Moffat in Scotland with
no alternative import routes;
there is no natural gas storage in Ireland; and
the UK has left the European Union which will lead, at the end of
the withdrawal period, to difficulties for Ireland in meeting the
requirements of EU law in relation to gas security of supply
including potential challenges for future compliance with
EU law”
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The increasing dependence on a single source of imported gas is emphasised below (Source: Gas Networks Ireland Network Development
Plan 2020).
Based on the government’s developing perception of Ireland’s
security of energy supply looking forwards to 2030, the Company
executed confidentiality agreements with two leading international
companies in the LNG business. In collaboration it developed a
bespoke commercial and technical concept to develop an offshore
engineering solution for an LNG import facility for Ireland using a
Floating Storage and Regasification Unit (“FSRU”). This would utilise
the existing Kinsale subsea gas pipeline, after decommissioning of the
gas field’s production facilities, and the onshore gas terminal at Inch
in County Cork, where there is already a connection to the Gas
Networks Ireland gas distribution grid.
Utilisation of existing gas infrastructure and an innovative and
simplified offshore FSRU LNG import facility (see below), requiring
relatively low capital investment with no need for additional fixed
infrastructure, is an attractive nearterm solution for addressing
Ireland’s security and diversity of energy supply for the period up to
and potentially even beyond 2030.
An FSRU vessel with mooring and loading system
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Source: APL Offshore
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Group Structure and List of Assets (continued)
The preliminary design concept was completed and costed for
delivery of between 250 to 275 mm cfgpd to the Irish gas market from
late 2024 onwards, subject to all regulatory consents being granted.
PLIL is applying for an LNG import licence and, in order to optimise
the commercial conditions for financing of the project, PLIL is also
seeking an exemption from rights of thirdparty access (“rTPA”).
The Company reviewed the opportunity of making a submission to
the Public Consultation on the expert advisory group report entitled
“Expanding Ireland’s Marine Protected Area Network”, published by
the Department of Housing, Local Government and Heritage.
The Company continued to work to meet the criteria required by the
regulatory authorities, including financial substance, to seek to secure
successor authorisations for the Ram Head project off Cork in the Celtic
Sea and for Corrib South (see below). No additional technical work was
undertaken. Joint venture partnerships and percentage interests and
asset descriptions remain unchanged from the 2019 Annual Report.
(Source: Gas Networks Ireland Network Development Plan 2020)
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The commercial and technical case for developing gas storage
capacity at Ram Head was reviewed in the context of Ireland’s security
of energy supply and a potential ability to store FSRU summer gas
volumes when gas demand and gas prices are traditionally lower.
Forward Work Programme
The Company will continue with the regulatory process of applying
for Marine Area Consent for the FSRU project as part of conforming
to new regulations put in place to replace some of the complicated
existing regulations that do not allow for security of energy supply to
be an important consideration.
In tandem the Company will continue with a submission to the Public
Consultation on the expert advisory group report entitled “Expanding
Ireland’s Marine Protected Area Network”, published by the
Department of Housing, Local Government and Heritage. Deadline
for submissions is 30 July 2021.
The purpose of these submissions will be to demonstrate that the
FSRU LNG project can be considered to be very much in the public
interest.
The LNG import licence will continue to be pursued with the focus on
defining the criteria for an exemption from rights of third party access
(“rTPA”).
Dialogue will be maintained with the regulatory authorities regarding
the applications for successor authorisations to the Corrib South and
Ram Head licensing options.
The gross firm budget estimate for 2021 expenditures is currently
£83,435.
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Principal Risks and Uncertainties
Exploration industry risks
Oil and gas drilling and operations is a speculative activity and involves
numerous risks and substantial and uncertain costs that could
adversely affect the Group.
Mitigation: Where possible the Board aims to build a diversified
portfolio of assets so that an adverse outcome is mitigated by the
prospects of favourable outcomes.
Oil and gas exploration and development activities are dependent on
the availability of skilled personnel, drilling and related equipment in
the particular areas where such activities will be conducted. Demand
for such personnel or equipment, or access restrictions may affect
the availability to the Group, particularly relevant when taking into
consideration the global impact of COVID19.
Mitigation: Management through many years of experience has a
network of independent contractors with skilled personnel and
equipment which it can access.
Oil and gas prices are highly volatile, and lower oil and gas prices will
negatively affect the Group’s financial position, capital expenditures
and results of operations.
Mitigation: By balancing projects with nearterm cash inflow
prospects with projects that require longterm funding the risk is
mitigated. Planning includes simulation of downside risk scenarios.
Reserve and resource data and estimated discounted future net cash
flows are estimates based on assumptions that may be inaccurate
and on existing economic and operating conditions that may change
in the future.
Mitigation: The Group has considerable experience in project
evaluation. It may resort from time to time to independent expert
consultants to verify assumptions. The Group focusses on projects
that require relatively low capital investment but can potentially
generate very high rates of return as a means of mitigating against
reduction in discounted future net profits.
The Group is dependent on the successful development of its oil and
gas assets.
Mitigation: The Group has diversified its profile away from regular oil
and gas exploration by undertaking a CO2 EOR project.
The principal subsurface geological risks that have been identified
specific to the Group’s portfolio are as follows:
Risk 1: In the immediate area of focus for drilling, which is the MOU1
Prospect in Morocco, the 2D seismic database is sparse and the
quality and completeness of the well logs in old offset wells pertinent
to understanding the geology of the previously drilled GRF1 and
MSD1 wells is poor.
Risk 2: GRF1 provides evidence of overpressuring of some potential
reservoirs which will have to be taken into consideration for the
purposes of safe well planning.
Risk 3: The existing sparse 2D seismic data demonstrate the presence
of seismic amplitude anomalies. There is a risk that these may not be
related to the presence of gas reservoirs or the presence of gas in
commercial quantities. The size of the potential gasgenerating source
kitchen is unknown and therefore there is a risk that traps may not
be efficiently filled to spill. In such circumstances gas resources could
be significantly reduced.
Mitigation: Extensive use of offset well data for the geologically
analogous, gasproducing Rharb Basin and information from the
Anchois1 Tertiary gas discovery in the offshore is used to improve
the overall knowledge base.
Independent consultants are used to help validate geological and
seismic interpretations.
Risk 4: Forecast maximum production rates for CO2 EOR rely on
modelled calculations and actual pilot CO2 EOR oil flow rates and
have not been tested yet by continuous CO2 EOR operations. The
pilot CO2 EOR operations have so far calibrated the desktop
production forecasts in line with anticipated rates, however there is
no guarantee that production will increase exponentially in line with
these predictions as more CO2 is injected over time. The technical
and commercial success of the CO2 EOR project is dependent
therefore on a comparison of the actual operational results versus
the preinjection desktop forecasts.
Risk 5: The volumes of CO2 required to be injected to increase
reservoir pressure from its currently low level in order to enhance oil
production have been estimated using reservoir models. These
models assume limited vertical and lateral communication of the five
Herrera reservoir sand intervals controlled by faulting and intervening
vertical seals. If this is not the case then significantly more CO2 will
be required to increase reservoir pressure and potentially enhance
oil production should CO2 escape into other geological formations or
adjacent fault compartments. Results of the pilot CO2 EOR confirm
limited lateral and vertical communication across potentially sealing
faults. However there is no guarantee that this situation will be
maintained as reservoir pressure
increases with continuous
C02 injection.
Risk 6: The volume of CO2 to be injected has also been estimated on
the basis of the remaining volume of oil in place in the reservoirs
using historical estimates made by other operators. If this volume has
been underestimated, then the volume of CO2 required for injection
will be larger and the commerciality of the project may therefore be
impacted.
Mitigation: All modelling of analytical data is reviewed and evaluated
by the relevant technical teams in Heritage and the MEEI as part of
the regulatory approval process. Satellite communications and data
logging were installed at the InnissTrinity CO2 EOR site to allow the
Group’s management realtime remotecontrol monitoring of
operational procedures to intervene if required to vary the volume
of CO2 being injected and the injection pressure.
Political risks
All of the Group’s operations are located in a foreign jurisdiction. As
a result, the Group is subject to political, economic and other
uncertainties, including but not limited to, changes in policies or the
personnel administering
terrorism, nationalisation,
them,
appropriation of property without fair compensation, cancellation or
modification of contract rights, foreign exchange restrictions,
currency fluctuations, export quotas, royalty and tax increases and
other risks arising out of foreign governmental sovereignty over the
areas in which these operations are conducted, as well as risks of loss
due to civil strife, acts of war, guerrilla activities and insurrection.
Mitigation: The Group only conducts operations in those countries
with a stable political environment and which have established
acceptable oil and gas codes. The Company adheres to all local laws
and pays heed to local customs.
Corporate risk
Risk: The Group’s success depends upon skilled management as well
as technical and administrative backup. The loss of service of critical
members of the Group’s team could have an adverse effect on the
business.
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The Group is dependent on the executive Directors to identify
potential business and acquisition opportunities in Trinidad, Morocco
and Ireland and to oversee and execute its oil and gas operations. The
loss of services of the executive Directors could materially adversely
affect it.
Mitigation: The Group periodically reviews the compensation and
contract terms of its consultants and service providers to ensure that
they are competitive, but subject to the working capital available to
the Group from time to time.
The executive Directors are material shareholders in the Group and
committed to developing shareholder value.
Financial and liquidity risks
The Group’s business
involves significant, but moderate by
comparison with the oil and gas sector in general, capital expenditure
and given the current liquidity position of the Group as at the date of
this report the Group will require additional funding to meet all of its
future work programmes if the business of the Group is to grow.
There is no guarantee that such additional funding will be available
on acceptable terms at the relevant time.
Mitigation: Management has demonstrated and continues to
demonstrate an ability to raise funds. Through timely and regular cash
flow projections proactive action is capable of being taken to pre
empt cash deficits. Such actions may
farmouts,
debtfinancing and equity fund raises.
include
Instability in the global financial system may have impacts on the
Group’s liquidity and financial condition that currently cannot be
predicted.
licence
Mitigation: Preemptive cut back of new potential
commitments; careful financial planning, currency hedging and
economic evaluation of opportunities with simulation of risks mitigate
against these risks. The Directors also maintain tight budgetry and
financial controls to ensure cash is spent in the most efficient manner.
Foreign exchange risks
The Group operates internationally and is exposed to foreign
exchange risk arising from various currency transactions, primarily
with respect to the Moroccan Dirham, Trinidadian dollar, Euro and
US Dollar.
Risks to exchange movements are mitigated by minimising the
amount of funds held overseas. All treasury matters are handled
centrally in Jersey. All requests for funds from overseas operations
are reviewed and authorised by Board members. The Group
endeavours to reduce its exposure to foreign currencies by holding
cash balances in the currency of intended expenditure and recognises
the profits and losses resulting from currency fluctuations as and
when they arise.
As the Group may undertake some project activity offshore Ireland
under the terms of agreements with the Irish regulatory authorities,
the Directors currently anticipate that the impact on the business of
the UK’s exit from the European Union will be limited to the effects
of potential increased foreign exchange fluctuations. As a result of
these fluctuations, it is expected that the reported results of the
Group may decline in the short to mediumterm. However, the
Directors do not expect there to be any significant lasting impact. The
Group does not anticipate any longlasting impact on accessing
overseas services and importing equipment, although due to
increased regulatory processing in such cases, project timelines may
be negatively impacted.
Liquidity risks
The Group’s liquidity risk is currently considered to be insignificant
and not material.
The Group does not enter into binding commitments for exploration
expenditure unless supported by adequate cash reserves and working
capital. Cash forecasts are updated continuously, and contingencies
are allowed for. The financial exposure of the Group will reduce as it
is the intention of the directors to partner with third parties at the
appropriate time in the appraisal and development cycle. The Group
structure facilitates investment in individual projects at the subsidiary
company level. The aftertax project economics for the Group’s
portfolio of projects are very robust and support the potential
payment of royalties and dividends to a company wishing to buy
equity in a specific project or projects. The Directors believe that the
ability to monetise parts of its portfolio of projects to improve
liquidity is viable given the pivotal market position the Group has
established in the jurisdictions within which it operates in respect of
developing C02 EOR and C02 sequestration, a Compressed Natural
Gas market and an LNG import option where currently no
competitors exist in these sectors in the aforementioned jurisdictions.
Furthermore, to maintain liquidity, the Group elected not to exercise
its option by 30 September 2020 to acquire FRAM Exploration
Trinidad Ltd.
Environmental risks
The Group is subject to various environmental risks and governmental
regulations and future regulations will become more stringent.
Mitigation: The Group is aware of these risks before it undertakes
licence commitments and periodically reevaluates these risks.
Climate change and climate change legislation and regulatory
initiatives could result in increased operating and capital costs to
address reducing C02 emissions, delays to regulatory and
environmental approvals and decreased demand for, in particular, oil.
In addition, investor and lender decisionmaking criteria are becoming
increasingly dominated by climate change awareness and
consequently loss of sentiment for financing the fossil fuel sector. As
a result, it will become increasingly difficult to raise equity and debt
finance for traditional oil and gas activities.
Mitigation: The Group’s strategy has always been since IPO in May
2018 to focus primarily on gas, which is currently being considered
as “sustainable” by the EU and suited therefore to accessing green
finance, and C02 sequestration to support “greener” oil production.
By focusing on jurisdictions where there is a need to reduce high
levels of C02 emissions from ammonia plants, imported fuel oil and
coal and oilfired power stations by substituting for gas and enacting
C02 sequestration, the Group is demonstrating its commitment to
ESG and sustainability necessary to attract responsible financing of
its activities. The Group has positioned itself in the energy transition
space with the intention of building local green energy hubs based
on a symbiotic relationship working in tandem between natural gas,
CO2 sequestration, hydrogen production and storage and renewable
energy to provide security of affordable energy supply and to support
and protect local communities through the “economic shock” of the
energy transition process.
Insurance risks
Oil and gas operations are subject to various operating and other
casualty risks that could result in liability exposure.
Mitigation: The Group comprehensively surveys its exposure to these
kinds of risks and considers taking either an appropriate level of
insurance cover or selfinsuring where judicious.
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Principal Risks and Uncertainties (continued)
The Group may not have enough insurance to cover all of its risks.
COVID19 will increase insurance costs.
Mitigation: A judicious quantum of selfinsurance may need to be
resorted to in these circumstances but currently the Group has access
to appropriate levels of insurance both at the corporate level and for
its operations.
Coronavirus Risk
The global public health emergency caused by the spread of the
coronavirus during the year under review is now well documented.
This has pervasively impacted negatively global economies; financial
and equity markets, including pension funds; forex exchange rates;
oil and gas commodity prices, caused by collapsing demand,
particularly from the aviation industry, and storage capacity being
oversaturated; and general investor and debtfinancing sentiment.
Divergent variants of coronavirus will create a significant public health
risk for the foreseeable future and vaccination programmes will
continually require monitoring and updating.
The principal risks identified are:
Risk 1: Suspension of international travel between many different
jurisdictions which impact the Group’s field operations insofar as
specialised drilling engineers and technicians are unable to be
despatched from overseas to operate, install or repair key pieces of
equipment necessary, in particular, for the conduct of safe drilling
operations.
A further consequence is the inability (or a delay) to mobilise drilling
services and equipment from overseas that may not be available in
the country of the Group’s operations.
The potential introduction of new coronavirus travel restrictions
cannot be ruled out but the timing of any such moves is not
predictable due to varying rates of the spread of coronavirus
throughout the pandemic.
Mitigation: The Star Valley drilling rig is currently stacked securely in
Morocco west of Guercif at no cost to the Group. No commitments
to rig mobilisation and an enactment of a drilling contract will be
made until public health and travel restrictions are relaxed and
market conditions improve. The Group maintains a close dialogue
with drilling services providers to determine which services remain
incountry, and also the rig contractor, to ensure the Group is “drill
ready” as soon as the coronavirus emergency ameliorates and travel
restrictions can be prudently relaxed.
The Group has developed a close working relationship with SDX
Energy in Morocco. SDX Energy operated a multiwell 2020 drilling
programme in the Rharb Basin using the Star Valley rig and is planning
to drill again using the same rig in 2021. As well as providing well
inventory at cost to the Group for the MOU1 well, the Group will also
be utilising drilling services and well and logistical support sourced
by SDX Energy, who also operate in Egypt. This greatly mitigates
against, but does not entirely eliminate, the risk that the Group
cannot source incountry equipment, services and personnel.
Risk 2: Restricted ability to operate incountry activities such as
drilling and site construction due to local restrictions on travel and
enforceable social distancing measures.
Mitigation: Trained incountry personnel have moved into place to
ensure continuity of CO2 EOR operations within the framework of
HSE public health restrictions enabled by the Trinidadian government
from time to time. CO2 EOR is seen as an essential industry. Secure
satellite communications linked to a datalogger were installed at the
InnissTrinity CO2 EOR site immediately prior to the coronavirus
emergency to allow the Group’s management realtime remote
control monitoring of operational CO2 injection parameters and
procedures.
Risk 3: Supply chain issues caused by equipment not being available
for purchase or delayed by customs if imported from overseas.
Mitigation: CO2 EOR spares and equipment are in a secure
warehouse and yard in Trinidad to cover immediate requirements
during the coronavirus emergency. Drilling inventory for Guercif also
remains accessible for purchase by the Group, at the appropriate
time, from a secure SDX Energy warehouse and yard in Morocco.
Risk 4: Collapsing oil and gas commodity prices caused by global
economic slowdown, oversupply, falling demand and storage filled
to capacity.
Mitigation: Project economics for CO2 EOR operations in Trinidad
have been stresstested at WTI US$25/barrel and are marginally
commercial based on Trinidad’s requirement for domestic oil
production to replace imports. Robust and commercially viable
project economics for Guercif have also been rerun at much lower
gas prices, undercutting lower imported fuel oil prices, with a
Compressed Natural Gas development scenario that fasttracks an
initial development of a gas discovery to the captive Casablanca
industrial market that currently relies on less efficient fuel oil imports.
The Group’s business development strategy is focussed on niche local
energy markets where pricing of and demand for oil and gas is not as
severely impacted by the global supply and demand dynamics.
Risk 5: Insufficient liquidity and working capital, undercapitalisation,
lack of revenue, contractual
liabilities and unfulfilled work
commitment obligations.
Mitigation: During the period to 31 December 2020 the Group has
completed two oversubscribed Placings to raise £4.008 million
(before expenses). The Group has sufficient liquidity and working
capital over the next 12 months to weather any additional impact
from a resurgence of the coronavirus pandemic and any resulting
volatility in the financial, equity and commodity markets. The Group
is in the shortterm making corporate overhead reductions to ensure
working capital is focussed on prioritising existing CO2 EOR cash
generating potential in Trinidad and completing the drilling of the
MOU1 exploration well on schedule.
A contingency to shut down noncommercial CO2 EOR wells would
be maintained to avoid any lossmaking business activities.
No new financial commitments or work programme liabilities are
being entered into. The existing drilling commitment for the Guercif
PA is planned to be executed in 2021 but can be delayed until Q2 2022
should a resurgence of coronavirus negatively impact market
conditions and preservation of working capital were to become a
priority. Ringfencing the working capital required to drill the MOU1
Prospect in Morocco in 2021 and to release US$ 1 million of the
Guercif PA bank guarantee in favour of ONHYM is a strategic objective
of the Group. Under the Guercif PA the Group has until the
18 September 2021 to complete the drilling commitment. The Group
has sought from and been granted by ONHYM a oneyear extension
to
of
18 September 2022 on the basis that the coronavirus emergency is a
Force Majeure event.
Initial Exploration Period of
the Guercif PA
the
The Group will maintain a “drillready” status in Morocco, and only
enter into financial liabilities that can be funded from the available
working capital reserved for the drilling of MOU1. The Group will use
its discretion to choose when to enact the Guercif drilling programme
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in the context of first reassessing market sentiment and market
conditions and management’s opinion as to prudent use of available
working capital.
The outstanding principal amount of the Convertible Loan Notes with
Arato have been repaid in full to leave the Group debtfree and to
improve its liquidity position.
Risk 6: Inability to access the capital markets for equity finance or the
lending market for debt finance.
Mitigation: The Group’s CO2 EOR operations in Trinidad were
commissioned prior to the coronavirus emergency. The initial C02
injection phase and monitoring of reservoir pressure buildup and
enhanced oil production was commenced and successfully and safely
completed on time during the coronavirus pandemic consistent with
the Group’s precoronavirus project schedule. The Group advanced
its well planning activities in Morocco prior to coronavirus and has
maintained a drillready status to resume its operational activities on
the ground at Guercif at the earliest opportunity afforded by the
relaxation of coronavirus public health restrictions. The Group is well
capitalised and is positioned for near term cash flow from operations.
The Group has no immediate requirement to access the capital or
lending markets over the next 12 months to execute its nearterm
work programmes. The Group will always remain open to accessing
additional equity funds if it can be shown that this would further
develop the Group’s business and lead to increased shareholder value
without excessive shareholder dilution.
Guercif remains an integral part of the Company’s business
development strategy and the value proposition, given the size of the
targets versus the Group’s current market capitalisation and the
ability to monetise by capitalising upon Moroccan industry’s heavy
reliance on imported fuel. It remains an important and sustainable
driver for share price performance after the coronavirus emergency
ameliorates. Coronavirus has no lasting impact on the fundamentals
of
the MOU1
Prospect presents.
the value proposition
that Guercif and
The Boards’ view is that the global economy will rebound, and
commodity prices will improve once the commodity oversupply is
exhausted as the coronavirus emergency becomes manageable. Shut
in production will take longer to be reestablished in this transition
period. The equity markets will recover, and the pace of the recovery
will accelerate as investor sentiment returns. There will be a strong
appetite for cashgenerating companies with developing ESG and
Sustainability credentials who have weathered the coronavirus storm
and that have potential for immediate growth to support appreciation
in share price. Many peer companies will be seeking to recapitalise
quickly as the equity markets improve but will not have projects as
sufficiently advanced as Guercif or as commercially attractive in the
nearterm to promote to attract new investors. The Company has
started discussions with suitable candidates to join us in our various
projects at the appropriate time and for a consideration that reflects
the investment made by the Group in its projects, the market
opportunity, and the risk versus reward value proposition.
The Company has developed projects that require a low quantum of
capital investment suited to the size of the market appetite for a small
cap company listed on the Standard List segment of the Main Market
in London.
Risk 7: Curtailment of expansion of business development activities
necessary to support value creation and shareholder equity values,
and reduction in the potential to generate future revenues from such
activities.
Mitigation: The Group’s business development strategy continues to
be focussed on niche local energy markets where pricing of and
demand for oil and gas is not severely impacted by the global supply
and demand dynamics.
Upscaling CO2 EOR operations in Trinidad, now that the pilot CO2 EOR
project has been derisked, can be implemented for very small
incremental amounts of capital deployment, inclusive of additional
well workovers for CO2 EOR production, that can potentially be
recovered within a few months from incremental production
revenues.
The Group has also started the process of identifying and evaluating
suitable producing assets in Trinidad with attractive synergies for
applying our existing InnissTrinity CO2 EOR expertise. The Group has
opened a dialogue with several operators with a view to supplying
our CO2 EOR services. Commercial terms that the Group can
potentially negotiate will be driven by the fact that the Group is well
capitalised; has exclusivity over CO2 supply; and most importantly
has developed the template for a viable CO2 EOR project that meets
all regulatory and environmental conditions required for approvals to
be granted to execute field operations. The Group also notes that the
extension of existing Incremental Production Services Contracts in
Trinidad will now also require a commitment to executing secondary
recovery work programmes (waterflood and CO2 EOR). Historically
waterflood has not been very successfully applied in Trinidad for
increasing secondary recovery in mature oil fields where oil gravity
and oil viscosity is high.
This prudent and low cost expansion of the Group’s business
development activities. focussed on derisked CO2 EOR operating
success, can potentially support value creation and shareholder
equity values and address any perceived reduction in the potential to
generate future revenues from such activities as a result of the
coronavirus pandemic.
The Group has successfully progressed and further developed its
business strategies during the coronavirus pandemic and is well
positioned for business growth going forward.
Future developments
The Group’s nearterm priority is to focus on developing increased
cash flow from its CO2 EOR project in the InnissTrinity field onshore
Trinidad. The CO2 delivery and injection system is operational and
the supply of CO2 has been secured. Progress on reservoir
repressurisation can now be evaluated remotely in realtime through
the Group’s dedicated secure internet site. Operations can therefore
continue, operating costs can be minimised, and the capital
investment required for the CO2 EOR project startup has already
been made. Next step is for continuous C02 injection with
determination of incremental oil production and attributable net
profits over a 12month period.
The derisking of the design, engineering and construction of the CO2
delivery and injection system and the recognition of the Group’s
developing knowledge and expertise in the CO2 EOR field and its
potential contribution to Sustainability through CO2 sequestration,
has created an environment for the Group to expand its business
development growth onshore Trinidad by leveraging this expertise.
The Group’s mediumterm priority remains to execute the Guercif
drilling programme in Morocco at the earliest opportunity. The Group
continues to be “drillready” with an incountry rig available to it
under a rig option agreement with Star Valley and an approved
Environmental Impact Assessment. The well location and well budget
has been approved by its government partner ONHYM. It is
anticipated at present that drilling operations will commence within
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and hydrogen storage and providing backup interruptible power for
wind and solar energy to improve resilience of grid supplies and
potential project economics. Expanding our responsible business
practices is a key benefit for our people, partners and the
communities that are affected by our supply chain. Security of
affordable energy supply and supporting in a just, fair and equitable
manner the energy transition to ameliorate the negative economic
impact on local communities currently dependent on traditional
forms of energy is a key objective of the Group.
At the corporate level, since the advent of the Covid19 emergency
in late March 2020 our management operate our business from
homebased locations, thereby reducing the high level of energy
consumed by a fixed office location and eliminating the CO2
emissions footprint left by commuting to work by many forms of
transport that emit pollutant CO2. Since late March 2020 no further
site visits were made to either Trinidad C02 EOR operations or
Morocco during the year under review.
The practical and pragmatic ways in which the Group are enacting its
climate awareness strategy in the period under review are described
in detail in the section on ESG metrics and Sustainability.
Paul Griffiths
Chief Executive Officer
27 May 2021
Principal Risks and Uncertainties (continued)
3 months from the lifting of some coronavirus restrictions on travel.
The Group has developed an economic model for a nearer term gas
monetisation strategy for Guercif that involves Compressed Natural
Gas being transported to the industrial centres of Morocco. The size
of the initial gas market is being assessed and capital and operating
costs will be tailored to fit the immediate marketing opportunity. The
Group’s experience and expertise with engineering, costing and
developing the CO2 EOR project in Trinidad will be applied to the CNG
project in Morocco. The “drillready” status, the ability to monetise
gas for relatively low amounts of capital investment and with low
operating costs, tax and royaltyfree production on the first 10.6 BCF
of net gas, and high profit margins based on the high price
(US$10 12/mcf) paid by Moroccan’s industrial gas users will be the
Group’s marketing tools to attract financing and potential joint
venture partners, if required, to help fasttrack an early gas
development.
The Group has repositioned its business strategy for Ireland to focus
on offshore regasification of LNG and gas storage in accordance with
EU guidelines for member States. Confidentiality agreements have
been signed with the Group’s preferred LNG supplier and the provider
of regasification vessels (“FSRU”) based on the Group’s presentation
of the marketing opportunity for gas in Ireland together with its
potential contribution to security and diversity of energy supply and
its ability to provide backup power at times of peak electricity
demand. The Group continues to engage with regulatory authorities
and infrastructure owners in Ireland in an application for an LNG
import licence. A technological solution is being matured to supply
between 250 and 275 mm to the end of the Kinsale gas pipeline,
subject to regulatory consent. The nearterm goal is to further refine
this solution and to demonstrate its ecological and environmental
benefits relative to other energy infrastructure projects (including
renewables) in preparation for an application for Marine Area
Consent. The Irish regulatory hurdles remain very high and
challenging, but the Group recognises that the Irish government has
started a process of public consultation on, amongst other matters,
security of energy supply, thus creating a window of opportunity for
the Group to take advantage of by leveraging its management’s
relevant experience, knowhow and expertise.
Liquidity remains a fundamental priority for the Group. The
Company’s business assets are commercially robust, well managed,
operated efficiently and have significant growth potential. Market
appreciation of management’s business strategy for developing
shareholder value has been demonstrated during the year through
the completion of two oversubscribed Placings to improve liquidity
during very difficult and challenging times in the financial and equity
markets.
Sustainability Report
The Group is committed to sustainable development of its gas assets
and its C02 EOR operations incorporating anthropogenic C02
sequestration.
To sustain our business, we must meet the expectations of our
stakeholders and focus on mitigating climate change, advancing the
circular economy so that nothing goes to waste and implementing
responsible business practices.
Our longterm ambition is to be a carbon neutral producer of greener
energy through the energy transition by developing a template for
local green energy hubs around existing underutilised infrastructure
that combine the best ESG and Sustainability practices. This should
include natural gaspowered energy where it replaces more carbon
intensive fossil fuel energy sources, CO2 sequestration, natural gas
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INVESTOR
INFORMATION
Report of the directors
for the year ended 31 December 2020
The Directors present their report together with the audited financial statements for the year ended 31 December 2020.
The Company’s Ordinary Shares were admitted on 24 May 2018 to a listing on the London Stock Exchange on the Official List pursuant to
Chapters 14 of the Listing Rules, which sets out the requirements for Standard Listings.
RESULTS AND DIVIDENDS
The Directors do not recommend the payment of a dividend (2019: nil).
DIRECTORS
The Directors who served during the year and up to the date hereof were as follows:
Paul Griffiths
Ron Pilbeam
Steve Staley
Carl Kindinger
Louis Castro
Date of Appointment
21 December 2017
19 March 2018
24 May 2018
19 July 2019
(resigned 29 June 2020)
13 July 2020
DIRECTORS THIRD PARTY INDEMNITY PROVISIONS
The Group maintained during the period and to the date of approval of the financial statements, indemnity insurance for its Directors and
Officers against liability in respect of proceedings brought by third parties.
GOING CONCERN
Notwithstanding the loss incurred during the year under review and following two successful placings to raise £3.56million gross
(£3.26million net) and £0.448million gross (£0.418million net) and the repayment in full of the outstanding principal of the Arato Convertible
Loan Notes, the Directors have a reasonable expectation that the Group will not need to raise funds to continue operations and meet its
current contractual liabilities during the COVID 19 pandemic for the foreseeable future.
In the case of Covid19 the potential impact and mitigation thereof is discussed in detail in the Strategic Report. The two planned major
initiatives for 2021 are drilling in Morocco and the continuance of CO2 EOR operations in Trinidad with enhanced oil production. Delays due
to the imposition of COVID19 restrictions in Morocco may or may not lead to increased well costs. This potential eventuality has been allowed
for through the successful completion of a post balance sheet placing to raise £1.785million gross (£1.64 million net). If C02 EOR operations
were to require additional working capital due to insufficient profits being generated from production revenues, then these operations could
be shut down if necessary. If for operational reasons there were to be a cost overrun on drilling the MOU1 well in Morocco and more working
capital were to be required for corporate running costs, and production profits from Trinidad were to be insufficient to meet any projected
working capital shortfall, then under these circumstances the Group would require funds to be raised. If directors’ endeavours to raise fresh
funds were to fail, they will institute a programme of cuts to directors’ and consultant’s remuneration and other third party corporate costs
until such time as US$1 million of the Guercif Bank Guarantee is returned after delivering to ONHYM the data from the MOU1 well. The
directors having made due and careful enquiry, are of the opinion that the Group has adequate working capital to execute its operations over
the next 12 months given that current spending commitments will prevail. The Group will therefore continue to adopt the going concern basis
in preparing the Annual Report and Financial Statements. Further details on their assumptions and their conclusion thereon are included in
the statement on going concern included in page 75 under accounting policies.
SUBSTANTIAL SHAREHOLDERS
As at 31 December 2020, the total number of issued ordinary shares with voting rights in the Company was 239,678,517. Pursuant to a placing
of 17,000,000 ordinary shares announced on 12 March 2021 and the subsequent admission of 5,215,155 new shares announced on
26 March 2021 the total number of issued ordinary shares was 245,161,422. The Company has been notified of the following interests of
3 per cent or more in its issued share capital as at 17 May 2021.
THE BANK OF NEW YORK (NOMINEES) LIMITED (672938)
HARGREAVES LANSDOWN (NOMINEES) LIMITED (15942)
INTERACTIVE INVESTOR SERVICES NOMINEES LIMITED (SMKTISAS)
HARGREAVES LANSDOWN (NOMINEES) LIMITED (HLNOM)
HARGREAVES LANSDOWN (NOMINEES) LIMITED (VRA)
INTERACTIVE INVESTOR SERVICES NOMINEES LIMITED (SMKTNOMS)
BARCLAYS DIRECT INVESTING NOMINEES LIMITED (CLIENT1)
HSDL NOMINEES LIMITED (MAXI)
MR RONALD J PILBEAM
TOTAL
% Holding
Ordinary shares held of the Company
38,243,266
35,310,893
19,496,882
16,607,406
13,237,201
11,498,953
10,938,268
8,282,530
7,585,794
161,201,193
15.60%
14.40%
7.95%
6.77%
5.40%
4.69%
4.46%
3.38%
3.09%
65.74%
Predator Oil & Gas Holdings plc Annual Report and Financial Statements 2020 x 35
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Report of the directors
for the year ended 31 December 2020 (continued)
FINANCIAL INSTRUMENTS
Details of the use of financial instruments by the Group are contained in note 15 of the financial statements.
GREENHOUSE GAS EMISSIONS
The Group does not have responsibility to disclose any other emission producing sources under the Companies Act 2006 (Strategic Report
and Directors’ Report) Regulations 2014. However, Management is committed to reducing its greenhouse gas emissions. As disclosed above,
amongst other measures taken, the installation of satellite communications facilities at the C02 EOR site of operations in Trinidad ensures a
more flexible working environment and will reduce the amount of travel required by management as part of their duties in overseeing the
Group’s projects.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to
prepare the financial statements in accordance with International Financial Reporting Standards (IFRSs’) as adopted by the EU and
applicable law.
Under Company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of
the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these financial statements,
the Directors are required to:
l
select suitable accounting policies and then apply them consistently;
l make judgements and accounting estimates that are reasonable and prudent;
l
state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the
financial statements;
l
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
In accordance with Article 103 of Companies (Jersey) Law 1991, the Directors are responsible for keeping adequate accounting records that
are sufficient to show and explain the Group’s transactions and disclose with reasonable accuracy at any time the financial position of the
Group and enable them to ensure that the financial statements comply with the requirements of Companies (Jersey) Law 1991 as a whole.
They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
They are further responsible for ensuring that the Strategic Report and the Report of the Directors and other information included in the
Annual Report and Financial Statements is prepared in accordance with applicable law in the United Kingdom.
The maintenance and integrity of the Group’s website is the responsibility of the Directors; the work carried out by the auditors does not
involve the consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred in
the accounts since they were initially presented on the website.
Legislation in Jersey governing the preparation and dissemination of the accounts and the other information included in annual reports may
differ from legislation in other jurisdictions.
DIRECTORS’ RESPONSIBILITIES PURSUANT TO DTR4 (DISCLOSURE AND TRANSPARENCY RULES)
The directors confirm to the best of their knowledge:
l
l
The group and company financial statements have been prepared in accordance with IFRSs as adopted by the European Union and Article 4
of the IAS Regulation and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group and Company;
and
The annual report includes a fair review of the development and performance of the business and financial position of the group and
company together with a description of the principal risks and uncertainties.
FUTURE DEVELOPMENTS
The Group’s plans for future developments are more fully set down in the Strategic Report, on pages 4 to 15.
STATEMENT AS TO DISCLOSURE OF INFORMATION TO THE AUDITOR
So far as the Directors are aware, there is no relevant audit information of which the Company’s auditor are unaware, and each Director has
taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish
that the Company’s auditor is aware of that information.
We confirm to the best of our knowledge:
l
l
The financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as whole;
The strategic report includes a fair review of the development and performance of the business and the position of the Company and the
undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they
face; and
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l
The annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary
for shareholders to assess the Company’s position and performance, business model and strategy.
AUDITORS
The Company’s auditor, PKF Littlejohn LLP, was initially appointed on 4 December 2017 and it is proposed by the Board that they be reappointed
as auditors at the forthcoming AGM. The auditors have expressed their willingness to continue in office.
EVENTS AFTER THE REPORTING DATE
These are more fully disclosed in Note 24.
By order of the Board
Paul Griffiths
Chief Executive Officer
27 May 2021
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Board of directors
Paul Griffiths, Chief Executive Officer (age 67)
Mr. Griffiths has 45 years’ oil and gas industry experience, including with the Libyan National Oil Corporation and
Gulf Oil and as consultant to Enterprise Oil, Amoco (Mediterranean) and the Arabian Gulf Oil Company, amongst
others, and as CEO of both Island Oil & Gas plc and Fastnet Oil and Gas plc. During this time Mr. Griffiths has
managed 2D and 3D seismic data acquisition and processing projects onshore and offshore; drilling and testing
programmes, both onshore and offshore; and geological and reservoir simulation desk top studies. Mr. Griffiths
is also experienced in business development in respect of licence acquisitions, farmins, farm outs, gas marketing
and gas sales contracts and negotiations with government agencies. In 2006, Mr. Griffiths put together and led
the team that drilled the first successful exploration well in offshore southeast Ireland in 16 years. In 2008 he
put together and led the team that generated and submitted the plan of development for the Amstel Field in
the Netherlands and in 2014 he put together and led the team that carried out the Tendrara gas field
reevaluation prior to a successful appraisal drilling programme by Sound Energy. He is a geology graduate of
the Royal School of Mines (London) and an Associate of the Royal School of Mines.
Ronald Pilbeam, Project Development Director (age 75)
Mr. Pilbeam has over 40 years’ technical and commercial experience in energyrelated E&P activities. During this
time Mr. Pilbeam has worked with Parsons Brinckerhoff in the United States, the Caribbean and Brazil, then with
United Technologies in Brazil, before becoming associated with Unigas International both in Brazil and
South Africa. Mr. Pilbeam has undertaken the management of a number of projects in oil & gas shipping, offshore
LNG, gastoliquids and onshore petrochemical plant, gas storage and gas handling, pipelines and terminals. In
so doing, Mr. Pilbeam has also amassed considerable international experience working with governments,
industry, and commerce, to achieve often challenging objectives. A British national, Mr. Pilbeam is an Engineering
graduate of King’s College (London), a licensed Professional Engineer (Canada), an Associate Member of the
Institution of Civil Engineers (UK), and a member of the Jersey Association of Directors and Officers.
Dr Stephen Staley, NonExecutive Chairman (age 61)
Dr Staley has over 35 years wideranging management, technical and commercial experience in the international
oil, gas and power sectors. He was until October 2019 the CEO and a director of Upland Resources Limited, a
Londonlisted (Standard Listing) oil & gas company which he cofounded, currently with assets in Tunisia and
onshore and offshore UK. He is a nonexecutive director of 88 Energy Limited, an Australian oil & gas company
with assets onshore Alaska. 88 Energy has a dual listing on the ASX and AIM. He is also nonexecutive chairman
of Nostra Terra Oil & Gas PLC, an AIMlisted oil & gas company with producing assets in Texas. Dr Staley
cofounded and brought to the AIM market both Fastnet Oil & Gas plc (where he was the founding CEO) and
Independent Resources plc (where he was the founding managing director). He was also both a technical
consultant to, and nonexecutive director of, Cove Energy plc – the highly successful East Africafocused explorer.
Dr Staley is owner and founder of Derwent Resources Limited, an upstream consultancy advising on oil and gas
opportunities. Prior to this he has worked for Cinergy Corp., Conoco and BP.
He holds a BSc (Hons.) in geophysics from Edinburgh University, a PhD in petroleum geology from Sheffield
University and an MBA from Warwick University. He is a fellow of the Geological Society and a member of the
European Association of Geoscientists & Engineers, the Petroleum Exploration Society of Great Britain and The
Arctic Club.
Louis Castro, NonExecutive Director (age 62)
Louis Castro has over 30 years’ experience in investment banking and broking both in the UK and overseas. Most
recently he was the Chief Financial Officer at Eland Oil & Gas plc. Previously he was Chief Executive of Northland
Capital Partners in London and before this was Head of Corporate Finance at Matrix Corporate Capital and at
Insinger de Beaufort. He has worked in corporate finance and the capital markets in diverse geographic areas
from the UK to the Far East, South America and Africa, including the execution of complex M & A transactions
from initiation through due diligence to negotiating and financing.
He started his career by qualifying as a Chartered Accountant with Coopers & Lybrand (now PWC), followed by
a spell at SG Warburg & Co. (now part of UBS). Louis is currently Executive Chairman of Orosur Mining Inc., and
a non executive director at Stanley Gibbons Group plc and Tekcapital plc, all quoted on the AIM market.
Louis graduated from the University of Birmingham with a double degree in Engineering & Economics; completed
a post graduate course in Production Engineering at Cambridge University and is a Fellow of the Institute of
Chartered Accountants in England & Wales.
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Corporate Governance Report
The Chairman of the Board of Directors of Predator Oil & Gas Holdings Plc (‘Predator’ or ‘the Company’ or’ the Group’ or ‘we/our’) has a
responsibility to ensure that Predator has a sound corporate governance policy and an effective Board.
The Board has not adopted, but voluntarily follows, the Quoted Companies Alliance Corporate Governance Code (“QCA Code”). The QCA Code
identifies ten principles to be followed in order for companies to deliver growth in longterm shareholder value, encompassing effective
management with regular and timely communication to shareholders. This report follows the structure of those principles and explains how
we have applied the guidance as well as disclosing any areas of noncompliance.
We will provide annual updates on our compliance with the code. The Board considers that the Group complies with the QCA Code so far as
is practicable having regard to the size, nature and current stage of development of the Company.
The sections below set out how the Group applies the ten principles of the QCA Code and sets out areas of noncompliance.
PRINCIPLE 1: ESTABLISH A STRATEGY AND BUSINESS MODEL WHICH PROMOTES LONGTERM VALUE FOR SHAREHOLDERS
The Company is an oil and gas exploration specialist, with operations in Morocco, Trinidad and Ireland. Our goal is to deliver long term value
for our shareholders. We aim to do this by identifying prospective and earlystage exploration projects. Consequently we:
l
l
l
use our expertise to identify areas with economically feasible resources,
assess the business environment of the target country and its attractiveness for prospecting and eventual development and production,
understand existing interests in a licence area in order to ensure we can earnin to existing interests on terms favourable to our
shareholders.
Oil and gas exploration is by its nature speculative and we aim to reduce the risks inherent in the industry by careful application of funds in
individual projects. We do that by:
l Reviewing existing exploration data;
l
Establishing close incountry partnerships for our projects;
l Applying the most appropriate costeffective exploration techniques in order to determine whether further work, using increasingly
expensive exploration techniques, is justified; and
l Appreciating the likely realisation routes that will be available to us as the project moves towards development.
PRINCIPLE 2: SEEK TO UNDERSTAND AND MEET SHAREHOLDER NEEDS AND EXPECTATIONS
The Company is committed to engaging with its shareholders to ensure that its strategy, operational results and financial performance are
clearly understood. We engage with our shareholders via roadshows, attending investor conferences and through our regular reporting on
the London Stock Exchange. Roadshows are typically timed to follow the release of interim and final results. The Company regularly takes part
in investor conferences, both in the UK and internationally, insofar as the current Covid 19 epidemic allows. LSE announcements include details
of the website, and include phone numbers to contact the Company and its professional advisors.
Private shareholders
The AGM is the main forum for dialogue with retail shareholders and the Board. The Notice of Meeting is sent to shareholders at least 21 days
before the meeting. All Directors attend the AGM and are available to answer questions raised by shareholders. For each vote, the number of
proxy votes received for, against and withheld is announced at the meeting. The results of the AGM are announced via the London Stock
Exchange. In addition, the Executive Directors regularly attend investor forums specific to the oil & gas industry and engage with shareholders
at those events. Investors can contact us via our website or by email.
Retail shareholders also regularly attend investor evenings held by our brokers or other industry bodies and we publicise our attendance via
LSE announcements. In addition, our up to date Corporate presentation is made available on our website.
The Company seeks to provide shareholders with virtual versions of the above activities during the Covid 19 epidemic.
Institutional shareholders
The Directors actively seek to build a relationship with institutional shareholders. Shareholder relations are managed primarily by the Chief
Executive Officer. The Chief Executive Officer makes presentations to institutional shareholders and analysts throughout the year, mainly in
London, though virtually during the Covid 19 epidemic. We also have adhoc meetings with our shareholders via conference call and email.
The Board as a whole is kept informed of the views and concerns of major shareholders by the Chief Executive Officer. Any significant investment
reports from analysts are also circulated to the Board. The NonExecutive Chairman and NonExecutive Director are available to talk with
major shareholders if required to discuss issues of importance to them and are considered to be Independent from the executive management
of the Company.
PRINCIPLE 3: TAKE INTO ACCOUNT WIDER STAKEHOLDER AND SOCIAL RESPONSIBILITIES AND THEIR IMPLICATIONS FOR LONG TERM
SUCCESS.
Aside from our shareholders, our most important stakeholder groups are our personnel and local partners and those local communities that
may be impacted by our exploration activities. The Board is regularly updated on stakeholder issues and their potential impact on our business
to enable the Board to understand and consider these issues in decisionmaking. The Board understands that maintaining the support of all
its stakeholders is paramount for the longterm success of the Company.
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Corporate Governance Report (continued)
Personnel
The Group does not have permanent staff in Jersey, Channel Islands. All staff are recruited under consultancy agreements as service providers.
We aim to provide an environment which will attract the best, retain and motivate our team and we monitor the effectiveness by regular
oneonone discussion. Our goal is to treat all staff fairly and equally and to promote ethical behaviour, diversity and nondiscrimination.
Local partners and communities
Our operations often provide employment in remote areas of developing countries. Essential to our success is the establishment of close
working relationships with local partners. We seek local partners who have a good understanding of the local exploration and oil and gas
exploration industry and regulations within their country, and with the capacity and capability to assist with the management and maintenance
of the project.
We are mindful of our obligations to the local environment and operate to high levels of health and safety in respect of both our local workers
and the local community. Staff training focuses on operating safety. Engagement with local communities is dependent on jurisdiction and the
stage of exploration but is typically by public forum or with local or regional leaders, including site visits and workshops. Social projects in the
local communities are dependent on local need and also the stage of exploration/level of project investment.
As projects move forward, towards potential production activities, we seek to bring in partners who can credibly make the investments to
move towards development and production. In doing so we have regard for their ability and desire to move projects forward, their industry
reputation and their commitment to treating the local communities fairly and protecting the environment. We enter agreements that allow
us to monitor their activities and have monthly updates on project progress.
PRINCIPLE 4: EMBED EFFECTIVE RISK MANAGEMENT, CONSIDERING BOTH OPPORTUNITIES AND THREATS, THROUGHOUT THE
ORGANISATION
Audit, risk and internal control
Financial controls
The Company has an established framework of internal financial controls, the effectiveness of which is regularly reviewed by the Executive
Management, the Audit Committee and the Board. The key financial controls are:
l
l
The Board is responsible for reviewing and approving overall company strategy, approving new exploration projects and budgets, and for
determining the financial structure of the Company including treasury, tax and dividend policy. Regular results and variances from plans
and forecasts are reported to the Board;
The Audit Committee, comprising the two Nonexecutive Directors, assists the Board in discharging its duties regarding the financial
statements, accounting policies and the maintenance of proper internal business, and operational and financial controls;
l Regular budgeting and forecasting is performed to monitor the Company’s ongoing cash requirements and cash flow forecasts are
circulated to the Board on a monthly basis;
l Actual results are reported against budget and prior year and are circulated to the Board;
l
The Company has an investment appraisal system that considers expected costs against a range of potential outcomes arising from the
exploration opportunities that we are invited to participate in;
l Regular reviews of exploration results are performed as the basis for decisions regarding future expenditure commitment;
l Due to the international nature of the business there are, at times, significant foreign exchange rate movement exposures. Cash flow
forecasting is done at the ‘required currency’ level and foreign currency balances are maintained to meet expected requirements; and
l
For exploration projects, we manage the risk of failure to find economic deposits by low cost early stage exploration techniques, with
detailed analysis of results. Moving projects to more expensive exploration techniques requires a rigorous review of results data prior to
deciding whether to proceed with further work.
Nonfinancial controls
The Board has ultimate responsibility for the Group’s system of internal control and for reviewing its effectiveness. However, any such system
of internal control can provide only reasonable, but not absolute, assurance against material misstatement or loss. The Board considers that
the internal controls in place are appropriate for the size, complexity and risk profile of the Group. The principal elements of the Group’s
internal control system include:
l Close management of the daytoday activities of the Group by the Executive Directors;
l An organisational structure with defined levels of responsibility, which promotes entrepreneurial decisionmaking and rapid
implementation whilst minimising risks; and
l Central control over key areas such as capital expenditure authorisation and banking facilities.
The Group reviews at least annually the effectiveness of its system of internal control, whilst also having regard to its size and the resources
available. As part of the Group’s plans we continue to review a number of nonfinancial controls covering areas such as regulatory compliance,
business integrity, health and safety, and corporate social responsibility. All personnel are aware of their obligations under antibribery and
corruption legislation.
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PRINCIPLE 5: MAINTAINING THE BOARD AS A WELLFUNCTIONING, BALANCED TEAM LED BY THE CHAIR
The Board comprises the NonExecutive Chairman, two Executive Directors and one NonExecutive Director. One nonexecutive Director has
extensive experience in the oil and gas industry, is a qualified geologist and has considerable experience of serving on the Board of
public companies.
The Board is satisfied that it has a suitable balance between independence on the one hand, and knowledge of the Company and industry on
the other, to enable it to discharge its duties and responsibilities effectively. All Directors are encouraged to use their independent judgement
and to challenge all matters, whether strategic or operational.
The Board aim to meet at least monthly. The agenda is set by the Company Secretary in consultation with the Chairman and CEO. The standard
agenda points include:
l Review of previous meeting minutes and actions arising therefrom;
l A report by the CEO covering all operational matters;
l Any update to the Register of Conflicts and
l Any other business.
Directors’ conflict of interest
The Company has effective procedures in place to monitor and deal with conflicts of interest. The Board is aware of the other commitments
and interests of its Directors, and changes to these commitments and interests are reported to and, where appropriate, agreed with the rest
of the Board. A Register of Conflicts is maintained and is a standard agenda item at each Board Meeting. The Board has access to the Company’s
advisers, including its brokers and its lawyers. The advisers do not typically provide materials for Board meetings except if requested to do so
for the purposes of discussing upcoming regulations and other issues.
Board meetings are deemed quorate if two Board members are present and providing 7 days’ notice of such meeting has been given and
waived by the nonattending Directors.
Directors and Officers Liability insurance is maintained for all Directors and key staff members.
PRINCIPLE 6: ENSURE THAT BETWEEN THEM THE DIRECTORS HAVE THE NECESSARY UPTODATE EXPERIENCE, SKILLS AND CAPABILITIES
The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills and experience, particularly so in the
area of oil and gas exploration and evaluation. All Directors receive regular and timely information on the Group’s operational and financial
performance. Relevant information is circulated to the Directors in advance of meetings by the Company Secretary. Contracts are available
for inspection at the Company’s registered office and at the Annual General Meeting (“AGM”).
Directors are selected having regard to the Company’s needs for a balance of operational, industry, legal and financial skills. Experience of the
Oil and Gas exploration industry is important but not critical, as is experience of running a public company.
All Directors retire by rotation at regular intervals in accordance with the Company’s Articles of Association.
The Board makes decisions regarding the appointment and removal and reelection of Directors, and there is a formal, rigorous and transparent
procedure for appointments. The Company’s Articles of Association require that at every AGM any director (i) who has been appointed by the
board since the last AGM or (ii) who held office since the first of the three previous AGMs and who did not retire at either of them or (iii) who
has been selected by the board for reelection shall retire from office and may offer himself for reappointment by the members.
Independent advice
All Directors are able to take independent professional advice in the furtherance of their duties, if necessary, at the Company’s expense from
lawyers, brokers and other professional advisors that they deem relevant. In addition, the Directors have direct access to the advice and
services of the Company Secretary.
PRINCIPLE 7: EVALUATE BOARD PERFORMANCE BASED ON CLEAR AND RELEVANT OBJECTIVES, SEEKING CONTINUOUS IMPROVEMENT
In each 12 month reporting period we intend to review the performance of the team as a unit to ensure that the members of the Board
collectively function in an efficient and productive manner. Over the same period the NonExecutive Directors will be seeking to set clear and
relevant objectives for the Executive Directors, and for the Board as a whole.
PRINCIPLE 8: PROMOTE A CULTURE THAT IS BASED ON ETHICAL VALUES AND BEHAVIOUR
The Board aims to lead by example and do what is in the best interests of the Company, its stakeholders and the environment. We operate in
remote and underdeveloped areas and ensure that our staff understand their obligations towards the environment and in respect of
antibribery and corruption.
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Directors’ Remuneration Report
PRINCIPLE 9: MAINTAIN GOVERNANCE STRUCTURES AND PROCESSES THAT ARE FIT FOR PURPOSE AND SUPPORT GOOD DECISION
MAKING BY THE BOARD
Board programme
The Board aims to meet monthly and as and when required. The Board sets direction for the Company through a formal schedule of matters
reserved for its decision. During the year to 31st December 2020 the Board met fifteen times. The Board and its Committees receive appropriate
and timely information prior to each meeting; a formal agenda is produced for each meeting and Board and Committee papers are distributed
by the Company Secretary several days before meetings take place. Any Director may challenge Company proposals and decisions are taken
democratically after discussion. Any Director who feels that any concern remains unresolved after discussion may ask for that concern to be
noted in the minutes of the meeting, which are then circulated to all Directors. Any specific actions arising from such meetings are agreed by
the Board or relevant Committee and are then followed up by the Company’s management.
Roles of the Board, Chairman and Chief Executive Officer.
The Board is responsible for the longterm success of the Company. There is a formal schedule of matters reserved to the Board. It is responsible
for overall Group strategy, approval of exploration projects, approval of the annual and interim results, annual budgets, dividend policy and
Board structure. It monitors the exposure to key business risks. There is a clear division of responsibility at the head of the Company. The
Chairman is responsible for running the business of the Board and for ensuring appropriate strategic focus and direction.
The Chief Executive Officer (“CEO”) is responsible for proposing the strategic focus to the Board, implementing it once it has been approved
and overseeing the management of the Company. The CEO is responsible for establishing and enforcing systems and controls, liaison with
external advisors and communicating with shareholders.
All Directors receive regular and timely information on the Group’s operational and financial performance. Relevant information is circulated
to the Directors in advance of meetings. The business reports regularly on its headline performance against its agreed budget; the Board
reviews these updates and any significant variances at each board meeting.
Board committees
The Board is supported by the Audit and Remuneration committees. Each committee has access to such resources, information and advice as
it deems necessary, at the cost of the Company, to enable the committee to discharge its duties. The two committees comprise both of the
NonExecutive Directors.
The Audit Committee provides a formal review of the effectiveness of the internal control systems, the Group’s financial reports and results
announcements and the external audit process. The Committee meets twice per year to review the published financial information and to
meet with the Auditors.
The Remuneration Committee provides a formal and transparent review of the remuneration of the Executive Directors and senior personnel
and makes recommendations to the Board on individual remuneration packages. The Committee met twice during the year.
The Audit committee has not provided a separate report for the current financial period, but intends to do so for next year’s report. It has met
once during the year.
PRINCIPLE 10: COMMUNICATE HOW THE COMPANY IS GOVERNED AND IS PERFORMING BY MAINTAINING A DIALOGUE WITH
SHAREHOLDERS AND OTHER RELEVANT STAKEHOLDERS
The Company communicates with shareholders through the Annual Report and Accounts, fullyear and halfyear results announcements, the
Annual General Meeting (AGM) and onetoone meetings with large existing or potential new shareholders. The Company regularly posts LSE
announcements covering operational and corporate matters, such as drilling results and significant changes in ownership positions across
historic projects in which it still retains an investment. A range of corporate information (including all Company announcements and a corporate
presentation) is also available to shareholders, investors and the public on the Company’s corporate website.
The Board receives regular updates on the views of shareholders through briefings and reports from Investor Relations, the CEO and the
Company’s brokers. The Company communicates with institutional investors frequently through briefings with management. In addition,
analysts’ notes and brokers’ briefings are reviewed to achieve a wide understanding of investors’ views.
Stephen Staley
Chairman
27 May 2021
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The Company’s Remuneration Committee comprises two NonExecutive Directors: Dr Stephen Staley and Louis Castro.
The Company’s Remuneration Committee operates within the terms of reference approved by the Board.
In the year to 31 December 2020 the two members of the Remuneration Committee met on 1 September 2020 to consider a related party
transaction involving a new subsidiary Predator LNG Ireland Ltd., more details of which are set out below, and in October 2020 to consider and
approve the issue of options to the Directors under the Company’s unapproved share option scheme as announced on 27th October 2020.
At a Board Meeting of the directors held on 13th August 2020, the Company’s share option scheme rules were updated, in particular to allow
for the amendment of the performance conditions attaching to the vesting of options to meet the changing circumstances of the Company.
The items included in this report are unaudited unless otherwise stated.
COMMITTEE’S MAIN RESPONSIBILITIES
l
The Remuneration Committee considers the remuneration policy, personnel engagement terms and remuneration of the Executive
Directors and senior management;
l
l
l
l
The Remuneration Committee’s role is advisory in nature and it makes recommendations to the Board on the overall remuneration
packages for Executive Directors and senior management in order to attract, retain and motivate high quality executives capable of
achieving the Company’s objectives;
The Remuneration Committee also reviews proposals for any share option plans and other incentive plans, makes recommendations for
the grant of awards under such plans as well as approving the terms of any performancerelated pay schemes;
The Board’s policy is to remunerate the Company’s executives fairly and in such a manner as to facilitate the recruitment, retention and
motivation of suitably qualified personnel as service providers; and
The Remuneration Committee, when considering the remuneration packages of the Company’s executives, will review the policies of
comparable companies in the industry.
CONSIDERATION OF SHAREHOLDER VIEWS
The Remuneration Committee considers shareholder feedback received and guidance from shareholder bodies. This feedback, plus any
additional feedback received from time to time, is considered as part of the Company’s periodic reviews of its policy on remuneration.
STATEMENT OF POLICY ON DIRECTORS’ REMUNERATION
The Company’s policy is to maintain levels of remuneration so as to attract, motivate, and retain Directors and Senior Executives of the highest
calibre who can contribute their experience to deliver industry leading performance with the Company’s operations. Currently Director’s
remuneration is not subject to specific performance targets.
In future periods the Company intends to implement a remuneration policy so that a meaningful proportion of Executive and Senior
Management’s remuneration is structured so as to link rewards to corporate and individual performance, align their interests with those of
shareholders and to incentivise them to perform at the highest levels. The Remuneration Committee considers remuneration policy and the
employment terms and remuneration of the Executive Directors and makes recommendations to the Board of Directors on the overall
remuneration packages for the Executive Directors. No Director takes part in any decision directly affecting their own remuneration.
There was no vote taken during the last general meeting with regard to the Director’s remuneration policy. This is considered reasonable given
the current size and stage of development of the Company and the fact that remuneration is not currently linked to performance. This will be
revisited in future periods once a meaningful remuneration policy has been implemented as noted above.
DIRECTORS’ REMUNERATION
The Directors who held office at 31 December 2020 and who had beneficial interests in the ordinary shares of the Company are summarised
as follows:
Name of Director Position
Dr Stephen Staley NonExecutive Chairman
Louis Castro NonExecutive Director
Paul Griffiths Chief Executive Officer
Ron Pilbeam Executive Officer
The interests in the shares of the Company of the Directors who served during the year were as follows:
31 December 2020 At the date of this report
Paul Griffiths
Ron Pilbeam
Carl Kindinger*
Louis Castro
Steve Staley
Total
*Carl Kindinger retired on 29th June 2020
Ordinary Shares
Share Options Ordinary Shares
Share Options
46,871,508
7,585,794
1,661,962
–
669,600
7,855,486 35,086,663
7,585,794
7,855,486
1,661,962
–
–
1,650,000
669,600
2,651,370
7,855,486
7,855,486
–
1,650,000
2,651,370
56,788,864
20,012,342
45,004,019
20,012,342
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Directors’ Remuneration Report (continued)
Share Option Scheme
The following Directors have been granted rights under the Group’s Share Option Scheme:
In issue at 2020 Exercised/ In issue at
31 December Grant Options lapsed 31 December Vesting periods
2019 date Awarded during year 2020 See Note 19
Paul Griffiths 4,005,486 24 May 2018 3,850,000 – 7,855,486
Ron Pilbeam 4,005,486 24 May 2018 3,850,000 – 7,855,486
Sarah Cope 1,001,370 24 May 2018 – – 1,001,370
Steve Staley 1,001,370 24 May 2018 1,650,000 – 2,651,370
Louis Castro – 1,650,000 – 1,650,000
Details of the Directors service agreements are set out below.
DIRECTORS’ SERVICE CONTRACTS
Dr Stephen Staley was appointed as a NonExecutive Director of the Company on 18 May 2018 when he entered into a letter of appointment
with the Company. Pursuant to his letter of appointment Dr Staley was entitled to an annual fee of £30,000 which includes consideration for
being a member the Remuneration Committee and for being a member of the Audit Committee.
Dr Staley is not entitled to receive any compensation on termination of his appointment (other than payment in respect of a notice period
where notice is served) and is entitled to be reimbursed all reasonable outofpocket expenses incurred in the proper performance of his
duties. Dr Staley’s appointment may be terminated by either party giving to the other three month’s prior written notice. The services of
Dr Staley are provided on a consultancy basis. Upon the retirement of Carl Kindinger on 29 June 2020, Dr Staley was appointed NonExecutive
Chairman of the Company at which time his annual fee was increased to £37,500. As from 1 September 2020, on his appointment to the
Board of Predator LNG Ireland Ltd as nonexecutive director, Dr Staley’s annual fee was increased to £50,000.
The Company established a share option scheme that became effective on 24 May 2018 for a longterm incentive plan for the award of share
options subject to performance conditions. The share option scheme includes Dr Staley as a beneficiary.
Louis Castro was appointed as a NonExecutive Director of the Company on 14 July 2020 when he entered into a letter of appointment with
the Company. Pursuant to his letter of appointment Louis Castro is entitled to an annual fee of £30,000 which includes consideration for being
a member the Remuneration Committee and for being a member of the Audit Committee. Louis Castro is not entitled to receive any
compensation on termination of his appointment (other than payment in respect of a notice period where notice is served) and is entitled to
be reimbursed all reasonable outofpocket expenses incurred in the proper performance of his duties. Louis Castro’s appointment may be
terminated by either party giving to the other three month’s prior written notice. As from 1 September 2020, upon his appointment to the
Board of Predator LNG Ireland Ltd as a nonexecutive director, Louis Castro’s annual fee was increased to £40,000.
The Company established a share option scheme that became effective on 24 May 2018 for a longterm incentive plan for the award of share
options subject to performance conditions. The share option scheme includes Louis Castro as a beneficiary.
Paul Griffiths provides his services as Chief Executive Officer under a consultancy agreement with the Company. The Company entered into a
consultancy agreement dated 18 May 2018 with PetroCeltex Consultancy Limited (“PetroCeltex”) under which PetroCeltex is to provide the
services of Paul Griffiths as Chief Executive of the Company, on a parttime basis.
On 1 May 2020 a new consultancy agreement with PetroCeltex Consultancy Limited (“PetroCeltex”), under which PetroCeltex continued to
provide the services of Paul Griffiths as Chief Executive of the Company, replaced that dated 18 May 2018. PetroCeltex Consultancy Limited
under the terms of the consultancy contract is entitled to the same fixed base fee of £80,000 per annum and a technical services consultancy
fee of £150 per hour.
The consultancy agreement dated 1 May 2020 was amended by Supplemental Agreement No.1 effective 1 September 2020 whereby
PetroCeltex is entitled to a fixed base fee of £115,000 per annum and a technical services consultancy fee of £150 per hour.
Paul Griffiths entered into a side letter dated 18 May 2018 with the Company confirming that the terms of any consultancy agreement will be
binding on him as an individual. Paul Griffiths also entered into a letter of appointment dated 21 December 2017 with the Company in respect
of his continued appointment as a director of the Company with effect from 24 May 2018, but with no additional fee payable to him over and
above the fee referred to above in the consultancy agreement. The continued appointment of Paul Griffiths as a director of the Company on
the terms of such appointment letter is subject to termination by either party on six months’ written notice. In addition, the Company may
forthwith terminate Paul Griffiths’ appointment as a director of the Company for, inter alia, a material breach by PetroCeltex of its obligations
under the consultancy agreement referred to above and Paul Griffiths may terminate such appointment for a material breach by the Company
of its obligations under the consultancy agreement referred to above.
During the year under review the Company incorporated a new subsidiary Predator LNG Ireland Ltd. (“PLIL”) to avail itself of a downstream
opportunity introduced by the executive management team through their historical network of downstream business relationships developed
over 40 years in the oil and gas sector. Without these longstanding working relationships, the Company would not have had credible substance
and a track record necessary to be taken seriously in the very competitive international LNG market. In recognition of this fact and the exclusivity
granted the Company in relation to the executive management team developing an offshore LNG import facility for Ireland, the Nonexecutive
Directors approved a related party transaction effective 1 September 2020 between PLIL and Paul Griffiths. Under the terms of an Advisory
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Agreement dated 1 September 2020, Paul Griffiths is entitled to a fixed Advisory Fee of £40,000 per annum and a technical services consultancy
fee of £150 per hour which is subject to prior approval by the Nonexecutive Directors.
Under an Exclusivity and Referral Agreement between PLIL and Hamilton Fox Holdings Ltd. (“HFHL”), a company incorporated jointly by
Paul Griffiths and Ronald Pilbeam to hold performance incentives under the aforementioned agreement dated 2 September 2020, HFHL has
an entitlement to performance incentives comprising up to a maximum of 20% of the issued share capital of PLIL split into four separate
tranches each of 5%. Performance Conditions for allotment of each tranche of 5% are defined as the signing of Collaboration Agreement in
each case between PLIL and bona fide international entities in the downstream LNG and gas infrastructure and distribution business. Allotment
of the final 5% tranche is conditional on a Financial Investment Decision (“FID”) being made in respect of developing an LNG import facility
for Ireland. In order to maintain good governance, the two Nonexecutive Directors of Predator Oil & Gas Holdings Plc were appointed to the
Board of PLIL to assure a casting vote in all PLIL Board decisions involving any perceived conflicts of interest.
The Company established a share option scheme that became effective on 24 May 2018 for a longterm incentive plan for the award of share
options subject to performance conditions. The share option scheme includes Paul Griffiths as a beneficiary.
Ronald Pilbeam provides his services as an Executive Director under a consultancy agreement with the Company. The Company entered into
a consultancy agreement dated 18 May 2018 with Ronald Pilbeam to provide the services of Ronald Pilbeam as project development director
of the Company, on a parttime basis (75 hours in each calendar month). Under the consultancy agreement, Ronald Pilbeam is entitled to a
fee of £50,000 per annum (plus VAT, if applicable) for the basic 75 hours per calendar month, £1,000 per 8 hour day (plus VAT, if applicable)
for each additional day or part day in excess of the first 75 hours in any calendar month, up to an annual cumulative cap of 400 hours in a
calendar year, and reimbursement of all reasonable expenses. The consultancy agreement may be terminated at any time by 3 months’ prior
written notice served by either party.
On 1 May 2020 a new consultancy agreement under which Ronald Pilbeam continued to provide the services of Ronald Pilbeam as project
development director of the Company, replaced that dated 18 May 2018. Ronald Pilbeam under the terms of the consultancy contract is
entitled to the same fixed base fee of £50,000 per annum and a technical services consultancy fee of £125 per hour.
The consultancy agreement dated 1 May 2020 was amended by Supplemental Agreement No.1 effective 1 September 2020 whereby
Ronald Pilbeam is entitled to a fixed base fee of £85,000 per annum and the same technical services consultancy fee of £125 per hour.
Ronald Pilbeam also entered into a letter of appointment dated 19 March 2018 with the Company in respect of his continued appointment as
a director of the Company with effect from 24 May 2018, but with no additional fee payable to him over and above the fee referred to in the
consultancy agreement above. The continued appointment of Ronald Pilbeam as a director of the Company on the terms of such appointment
letter is (subject to limited exceptions) for an initial period of 12 months following Admission and thereafter subject to termination by either
party on three months’ written notice. In addition, the Company may forthwith terminate Ronald Pilbeam’s appointment as a director of the
Company for, inter alia, a material breach by Ronald Pilbeam of his obligations under the consultancy agreement referred to above, and
Ronald Pilbeam may terminate such appointment for a material breach by the Company of its obligations under the consultancy agreement
referred to above.
During the year under review the Company incorporated a new subsidiary Predator LNG Ireland Ltd. (“PLIL”) to avail of a downstream
opportunity introduced by the executive management team through their historical network of downstream business relationships developed
over 40 years in the oil and gas sector. Without these longstanding working relationships the Company would not have had credible substance
and a track record necessary to be taken seriously in the very competitive international LNG market. In recognition of this fact and the exclusivity
granted the Company in relation to the executive management team developing an offshore LNG import facility for Ireland, the Nonexecutive
Directors approved a related party transaction effective 1 September 2020 between PLIL and Ronald Pilbeam. Under the terms of a
SubAdvisory Agreement dated 1 September 2020, Ronald Pilbeam is entitled to a fixed Advisory Fee of £40,000 per annum and a technical
services consultancy fee of £150 per hour which is subject to prior approval by the Nonexecutive Directors.
Under an Exclusivity and Referral Agreement between PLIL and Hamilton Fox Holdings Ltd. (“HFHL”), a company incorporated jointly by
Paul Griffiths and Ronald Pilbeam to hold performance incentives under the aforementioned agreement dated 2 September 2020, HFHL has
an entitlement to performance incentives comprising up to a maximum of 20% of the issued share capital of PLIL split into four separate
tranches each of 5%. Performance Conditions for allotment of each tranche of 5% are defined as the signing of Collaboration Agreement in
each case between PLIL and bona fide international entities in the downstream LNG and gas infrastructure and distribution business. Allotment
of the final 5% tranche is conditional on a Financial Investment Decision (“FID”) being made in respect of developing an LNG import facility
for Ireland. In order to maintain good governance the two Nonexecutive Directors of Predator Oil & Gas Holdings Plc were appointed to the
Board of PLIL to assure a casting vote in all PLIL Board decisions involving any perceived conflicts of interest.
The Company established a share option scheme that became effective on 24 May 2018 for a longterm incentive plan for the award of share
options subject to performance conditions. The share option scheme includes Ronald Pilbeam as a beneficiary.
REMUNERATION COMPONENTS
For the year ended 31 December 2020 consultancy fees and a share incentive scheme were the only two components of remuneration. The
Company established a share option scheme that became effective on 24 May 2018 for a long term incentive plan for the award of share
options. Effective 27 October 2020 vesting requirements for Executive Directors Paul Griffiths and Ronald Pilbeam are subject to any one of
certain targets being reached inter alia the injection/sequestration of 600MT Liquid CO2 at the CO2 EOR Pilot Project Trinidad. Also effective
27 October 2020 vesting requirements for Nonexecutive Directors are subject to the expiration of six months from date of grant
The Board is not planning to consider any other components of director remuneration during the year under review.
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Directors’ Remuneration Report (continued)
DIRECTORS’ EMOLUMENTS AND COMPENSATION
Director
Carl Kindinger*
Louis Castro
Stephen Staley
NonExecutive Total
Paul Griffiths
Ronald Pilbeam
Executive Total
Total
*Retired on 29 June 2020
2020
£
8,954
17,082
36,250
62,286
178,200
175,375
353,575
415,861
2019
£
11,230
–
30,000
41,230
150,310
128,125
278,435
319,665
There were no awards of annual bonuses or incentive arrangements other than share options granted in the period. Remuneration was
therefore fixed in nature and no illustrative table of the application of remuneration policy has been included in this report.
Pension entitlements
The Company does not currently have any pension plans for any of the directors and does not pay pension amounts in relation to their
remuneration.
Directors’ interests in share warrants
Directors do not hold any share warrants over ordinary shares.
The Committee considers that the current remuneration of Executive Directors to be consistent with pay and appointment benefits across
the Group.
UK 10year performance graph
The directors have considered the requirement for a UK 10year performance graph comparing the Group’s Total Shareholder Return with
that of a comparable indicator. The directors do not currently consider that including the graph will be meaningful because the Company has
only been listed since May 2018, is not paying dividends and is currently incurring losses as it gains scale. The directors therefore do not
consider the inclusion of this graph to be useful to shareholders at the current time. The directors will review the inclusion of this table for
future reports.
UK 10year CEO table and UK percentage change table
The directors have considered the requirement for a UK 10year CEO table and UK percentage change table. The directors do not currently
consider that including these tables would be meaningful because, as described under the Directors’ Service Contracts section above directors
have been engaged in the Company only since May 2018. The directors will review the inclusion of this table for future reports.
Relative importance of spend on pay
The Directors have considered the requirement to present information on the relative importance of spend on pay compared to shareholder
dividends paid. Given that the Company does not currently pay dividends the directors have not considered it necessary to include such
information.
Policy for new appointments
Base salary levels will take into account market data for the relevant role, internal relativities, the individual’s experience and their current
base salary. Where an individual is recruited at below market norms, they may be realigned over time (e.g. two to three years), subject to
performance in the role. Benefits will generally be in accordance with the approved policy.
For external and internal appointments, the Committee may agree that the Company will meet certain relocation and/or incidental expenses
as appropriate.
Policy on payment for loss of office
Payment for loss of office would be determined by the Remuneration Committee, taking into account contractual obligations.
Approved by the Board on 27 May 2021.
Dr Stephen Staley
Chairman of the Remuneration Committee
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Independent Auditor’s Report To The Members Of Predator Oil & Gas Holdings Plc
OPINION
We have audited the group financial statements of Predator Oil & Gas Holdings Plc (the ‘group’) for the year ended 31 December 2020 which
comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated Statement
of Changes in Equity, the Consolidated Statement of Cash Flows and notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
In our opinion, the group financial statements:
l
l
l
give a true and fair view of the state of the group’s affairs as at 31 December 2020 and of its loss for the year then ended; and
have been properly prepared in accordance with IFRSs as adopted by the European Union; and
the financial statements have been prepared in accordance with the requirements of the Companies (Jersey) Law 1991.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are
independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of
the financial statements is appropriate. Our evaluation of the directors’ assessment of the group’s ability to continue to adopt the going
concern basis of accounting included a review of management’s assessment of the going concern, budget for the twelve months following
the reporting date. Our audit procedures include review of reasonableness of the assumptions used by the directors to prepare the budget
and consideration of the impact of COVID19, and stress tested where appropriate. From our review, we have noted that the Company has
raised significant funds since the year end which the directors have concluded as sufficient to ensure that they can meet their financial
obligations as they fall due. Most of the Company’s expenses are discretionary and following the settlement of the convertible debt during
the year, the Company has very little in terms of liabilities.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the group’s ability to continue as a going concern for a period of at least twelve months from when
the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
OUR APPLICATION OF MATERIALITY
The scope of our audit was influenced by our application of materiality. The quantitative and qualitative thresholds for materiality determine
the scope of our audit and the nature, timing and extent of our audit procedures.
The materiality applied to the group financial statements was set at £33,000 (2019: £24,500). Performance materiality was set at £26,000
(2019: £19,600), being 80% of materiality for the financial statements as a whole.
Materiality has been calculated as 2% of the benchmark of expenses, which we have determined, in our professional judgement, to be the
principal benchmark relevant to members of the group in assessing financial performance. As the group has yet to begin trading, the key focus
of the group is to restrict expenditure in order to use the resources to advance the development of its investments.
We agreed that we would report to the audit committee all misstatements we identified through our audit with a value in excess of £1,600,
in addition to other audit misstatements below that threshold that we believe warrant reporting on qualitative grounds.
OUR APPROACH TO THE AUDIT
In designing our audit, we determined materiality, as above, and assessed the risks of material misstatement in the group financial statements.
In particular, we considered at areas involving significant accounting estimates and judgement by the directors and including future events that
are inherently uncertain, in particular with regard to the recoverability of loan receivable. We also addressed the risk of management override of
internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material
misstatement due to fraud. Procedures were then performed to address the risks identified and for the most significant assessed risks of material
misstatement, the procedures performed are outlined below in the key audit matters section of this report
As part of our planning, we assessed all components of the group for their significance in order to determine the scope of the work to be performed.
There were no entities of the group which were considered to be significant components other than the parent. A full scoped audit was therefore
performed to support our audit opinion on the group financial statements of Predator Oil & Gas Holdings Plc and was based on group materiality
and an assessment of risk at group level. The remaining components of the group were subject to analytical review and targeted testing as
appropriate as they are not material.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of
the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified,
including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts
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Independent Auditor’s Report To The Members Of Predator Oil & Gas Holdings Plc (continued)
of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How the scope of our audit responded to the key audit matter
The recoverability of loan receivable from FRAM £468k (Note 12)
There is risk that the loan may not be recovered if there is
insufficient oil production and/or no profits are generated from
sales.
The Group entered into a Well Participation Agreement (WPA) with
FRAM Exploration Trinidad Limited (“FRAM”), a wholly owned
subsidiary of Bahamas Petroleum Plc, listed on AIM.
The loan is repaid from future profits enhanced C02 Enhanced Oil
Recovery (EOR) production revenues. Profits are generated after
deduction of direct costs, certain operating costs as described in the
WPA, including loan costs.
Lower oil prices and/or extended time to recover produce barrels of
oils would delay the recovery of the FRAM loan.
We have obtained and reviewed the directors assessment and our
audit procedures included:
l Reviewing management’s assessment of the recoverability of
the loan;
l Reviewing disclosures of the critical accounting estimates;
l Reviewing the management assessment to underlying supports
(i.e. CO2 EOR forecast production profile); and
l Reviewing the Regulatory News (RNS) and board minutes of the
Company as well as those of the owners of FRAM as they are
also listed on AIM.
l Discussed and challenged the assumptions that the Directors
provided to us in support of the above procedures undertaken
In forming our opinion on the financial statements, which is not
modified we draw to the user’s attention the disclosures within
Note 12 and within the areas of estimates of judgments which states
that the loan is only recoverable from future net revenues which
have yet to be realised. The financial statements do not include
adjustments that would result if the Company is unable to recover
the loan due from FRAM.
OTHER INFORMATION
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report
thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the group financial
statements does not cover the other information and we do not express any form of assurance conclusion thereon. Our responsibility is to
read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements
or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the
financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
We have nothing to report in respect of the following matters in relation to which the Companies (Jersey) Law 1991 requires us to report to
you if, in our opinion:
l
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by
us; or
l
the financial statements are not in agreement with the accounting records and returns; or
l we have not received all the information and explanations we require for our audit.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the preparation of the group financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the group financial statements, the directors are responsible for assessing the group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend
to liquidate the group or to cease operations, or have no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these financial statements.
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INVESTOR
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Irregularities, including fraud, are instances of noncompliance with laws and regulations. We design procedures in line with our responsibilities,
outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable
of detecting irregularities, including fraud is detailed below:
l
Identified and assessed the risks of material misstatement of the group’s financial statements, whether due to fraud or error, designed
and performed audit procedures responsive to those risks, and obtained audit evidence that is sufficient and appropriate to provide a
basis for our opinion.
l Obtained an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group’s internal control.
l Concluded on the appropriateness of managements’ use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group’s ability to
continue as a going concern. In auditing the financial statements, we have concluded that the director’s use of the going concern basis
of accounting in the preparation of the financial statements is appropriate. However, future events or conditions may occur after the year
end which no one cannot realistically predict due to unforeseen factors or global events, like for example if an event similar to Covid19
arises again, may cause the group to cease to continue as a going concern.
l We obtained an understanding of the group and the sector in which they operate to identify laws and regulations that could reasonably
be expected to have a direct effect on the financial statements. We obtained our understanding in this regard through discussions with
management.
l We determined the principal laws and regulations relevant to the group in this regard to be those arising from Company (Jersey) Law
1991, Disclosure and Transparency Rules.
l We designed our audit procedures to ensure the audit team considered whether there were any indications of noncompliance by the
group with those laws and regulations. These procedures included, but were not limited to:
o
o
o
o
Enquiries of management
Review of board minutes
Review of RNS publications
Review of financial statement disclosures and testing to support documentation where applicable, to assess compliance with
applicable laws and regulations.
l As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing audit procedures
which included, but were not limited to: the testing of journals; reviewing accounting estimates for evidence of bias; and evaluating the
business rationale of any significant transactions that are unusual or outside the normal course of business.
l
Evaluate the overall presentation, structure and content of the group financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
l Obtained sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group
to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of
the group audit. We remain solely responsible for our audit opinion.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material
misstatement in the financial statements or noncompliance with regulation. This risk increases the more that compliance with a law or
regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of
instances of noncompliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves
intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
USE OF OUR REPORT
This report is made solely to the company’s members, as a body, in accordance with Article 113A of the Companies (Jersey) Law 1991. Our
audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other
than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Zahir Khaki (Engagement Partner)
For and on behalf of PKF Littlejohn LLP
Recognised Auditor
27 May 2021
15 Westferry Circus
Canary Wharf
London E14 4HD
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Consolidated statement of comprehensive income
for the year ended 31 December 2020
Administrative expenses
Operating loss
Finance income
Finance expense
Loss for the year before taxation
Taxation
Loss for the year after taxation
Comprehensive income
Total comprehensive loss for the year attributable to the owner of the parent
Earnings per share basic and diluted (pence)
01.01.2020 to
31.12.2020
£
01.01.2019 to
31.12.2019
£
Notes
4
(1,464,162)
(1,204,464)
(1,464,162)
–
(225,359)
(1,204,464)
12
(74,791)
(1,689,521)
–
(1,279,243)
–
(1,689,521)
(1,279,243)
–
–
(1,689,521)
(1,279,243)
(0.8)
(1.2)
5
6
8
The accompanying accounting policies and notes on pages 58 to 68 form an integral part of these financial statements.
All items in the above statement derive from continuing operations.
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Consolidated statement of financial position
as at 31 December 2020
Noncurrent assets
Tangible fixed assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Equity attributable to the owner of the parent
Share capital
Reconstruction reserve
Other reserves
Retained deficit
Total equity
Noncurrent liabilities
Trade and other payables
Current liabilities
Trade and other payables
Total liabilities
Total liabilities and equity
Notes
31.12.2020
£
31.12.2019
£
10
12
13
16
18
5,592
5,592
7,158
7,158
1,577,858
1,325,751
2,903,609
2,909,201
1,381,175
109,716
1,490,891
1,498,049
6,832,564
2,797,421
458,840
(7,263,116)
2,346,336
3,270,648
256,416
(5,573,595)
2,825,709
299,805
17
–
918,406
14
83,492
279,838
83,492
1,198,244
2,909,201
1,498,049
The accompanying accounting policies and notes on pages 58 to 68 form an integral part of these financial statements.
The Company has adopted the exemption under Companies (Jersey) Law 1991 Article 105 (11) not to prepare separate accounts. The Group
reported a loss after taxation for the year of £1.69million (2019: £1.28 million loss). The financial statements on pages 71 to 94 were approved
and authorised for issue by the Board of Directors on 27 May 2021 and were signed on its behalf by:
Paul Griffiths
Director
27 May 2021
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Consolidated statement of changes in equity
For the year ended 31 December 2020
Attributable to owner of the parent
Share based
payments
Share
premium
Share Capital
Balance at 31 December 2018
Issue of ordinary share capital
Issue of warrants
Fair value of share options
Loan note conversion premium
Total contributions by and distributions to owners of the parent
recognised directly in equity
Loss for the year
Total comprehensive income for the year
Balance at 31 December 2019
Issue of ordinary share capital
Issue of warrants
Fair value of share options
Transaction costs
Total contributions by and distributions to owners of the parent
recognised directly in equity
Loss for the year
Total comprehensive income for the year
Balance at 31 December 2020
£
£
1,837,086 3,294,898
–
–
–
(24,250)
509,250
–
–
–
£
81,570
–
81,385
93,461
–
Retained
deficit
£
(4,294,352)
–
–
–
–
Total
£
919,202
509,250
81,385
93,461
(24,250)
2,346,336 3,270,648
256,416
(4,294,352)
1,579,048
–
–
–
–
–
–
(1,279,243)
(1,279,243)
(1,279,243)
(1,279,243)
2,346,336 3,270,648
256,416
(5,573,595)
299,805
4,486,228
–
–
–
–
–
(473,227)
–
100,451
101,973
–
–
–
4,486,228
100,451
101,973
(473,227)
6,832,564 2,797,421
458,840
(5,573,595)
4,515,230
–
–
–
–
–
–
(1,689,521)
(1,689,521)
(1,689,521)
(1,689,521)
6,832,564 2,797,421
458,840
(7,263,116)
2,825,709
The accompanying accounting policies and notes on pages 58 to 68 form an integral part of these financial statements.
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FINANCIAL
STATEMENTS
INVESTOR
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Consolidated statement of cash flows
for the year ended 31 December 2020
Cash flows from operating activities
Loss for the period before taxation
Adjustments for:
Issue of share options
Fair value of warrants
Finance income
Finance expense
Share issue costs
Amortisation of transaction costs
Depreciation
Foreign exchange
Decrease/(increase) in trade and other receivables
(Decrease)/increase in trade and other payables
Net cash used in operating activities
Cash flow from investing activities
Loan advances
Purchase of computer equipment
Disposal of computer equipment
Net cash generated from investing activities
Cash flows from financing activities
Proceeds from issuance of shares, net of issue costs
Proceeds from issue of convertible loan notes, net of issue costs
Redemption of convertible loan notes
Finance expense paid
Finance income received
Net cash generated from financing activities
Effect of exchange rates on cash
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Noncash transaction
Notes
19
19
5
01.01.2020
to
31.12.2020
£
01.01.2019
to
31.12.2019
£
(1,689,521)
(1,279,243)
101,973
100,451
–
128,765
195,000
96,594
1,642
252,867
25,919
(196,346)
93,461
–
(12)
–
–
74,791
1,158
–
(1,167,848)
209,568
(982,656)
(2,068,125)
10
10
(290,419)
(842)
767
(201,077)
(4,694)
–
(290,494)
(205,771)
3,535,550
–
(746,000)
(115,315)
–
–
1,410,000
–
–
12
2,674,235
1,410,012
(185,049)
1,216,035
109,716
–
(863,884)
973,600
1,325,751
109,716
During the year 15,192,506 ordinary shares with a nominal value £282,450 were issued as part of the loan note conversion. Further details
are disclosed in Note 16.
The accompanying accounting policies and notes on pages 58 to 68 form an integral part of these financial statements.
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Statement of accounting policies
for the year ended 31 December 2020
Predator Oil & Gas Holdings Plc (“the Company”) and its subsidiaries (together “the Group”) are engaged principally in a CO2 EOR operations and
C02 sequestration business in the Republic of Trinidad and Tobago and maintaining an exploration and appraisal portfolio in Ireland and Morocco.
The Company’s ordinary shares are on the Official List of the UK Listing Authority in the Standard Listing section of the London Stock Exchange.
Predator Oil & Gas Holdings plc was incorporated in 2017 as a public limited company under Companies (Jersey) Law 1991 with registered number
125419. It is domiciled and registered at 3rd Floor, Standard Bank House, 47–49 La Motte Street, St Helier, Jersey, JE2 4SZ, Channel Islands.
BASIS OF PREPARATION AND GOING CONCERN ASSESSMENT
The principal accounting policies adopted in the preparation of the financial information are set out below. The policies have been consistently
applied throughout the current year and prior year, unless otherwise stated. These financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs and IFRIC interpretations) issued by the International Accounting Standards Board (IASB) as
adopted by the European Union and with those parts of the Companies (Jersey) Law, 1991 applicable to companies preparing their accounts
under IFRS. The Company has adopted the exemption under Companies (Jersey) Law 1991 Article 105 (11) not to prepare separate accounts.
The consolidated financial statements incorporate the results of Predator Oil & Gas Holdings Plc and its subsidiary undertakings as at
31 December 2020.
The financial statements are prepared under the historical cost convention on a going concern basis. The financial statements of the subsidiaries
are prepared for the same reporting period as the parent company, using consistent accounting policies. All intragroup balances, transactions,
income and expenses and profits and losses resulting from intragroup transactions that are recognised in assets, are eliminated in full.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be
consolidated until the date that such control ceases.
The preparation of financial statements requires an assessment on the validity of the going concern assumption. At the date of these financial
statements the Directors expect that the Group will not require further funding for the Group’s corporate overheads; Irish licence interests,
Moroccan licence or for the further development of the CO2 EOR pilot project. Post the year end the Group raised £1.785 million gross through
a Placing, to supplement funds required for drilling the MOU1 well in Morocco in the event costs escalated due to COVIDrelated impositions
and to provide additional working capital. The Directors are confident that the Group will be able to raise further funds as and when it considers
appropriate to meet requirements over the course of the next 24 months, in cash, from the Group’s share of production profits from Trinidad,
through the return of US$1 million of the Guercif Bank Guarantee, as debt finance, joint venture or farminee partner equity, share issues or
otherwise. Failing the success of these fundraising activities the Directors will be prepared to accept appropriate reductions in their
remuneration to conserve cash resources.
CHANGES IN ACCOUNTING POLICIES
At the date of approval of these financial statements, certain new standards, amendments and interpretations have been published by the
International Accounting Standards Board but are not as yet effective and have not been adopted early by the Group. All relevant standards,
amendments and interpretations will be adopted in the Group’s accounting policies in the first period beginning on or after the effective date
of the relevant pronouncement.
The Directors do not anticipate that the adoption of these standards and interpretations, or any of the amendments made to existing standards
as a result of the annual improvements cycle, will have a material effect on the financial statements in the year of initial application.
Standards and amendments to existing standards effective 1 January 2020
l
Amendments to References to the Conceptual Framework in IFRS Standards – effective 1 January 2020.
l
Amendments to IAS 1 and IAS 8: Definition of Material – effective 1 January 2020.
These amendments do not have a material effect on the financial statements of the Group.
New Standards, amendments and interpretations effective after 1 January 2020 and have not been early adopted
The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the financial statements are listed below.
The Group and Company intend to adopt these standards, if applicable, when they become effective. These are summarised below:
Amendments to IAS 1: Classification of Liabilities as Current or Noncurrent: the amendments clarify that the classification of liabilities as
current or noncurrent should be based on rights that are in existence at the end of the reporting period, and refer to the “right” to defer
settlement by at least twelve months. They make explicit that only rights in place “at the end of the reporting period” should affect the
classification of a liability. The amendments clarify that classification is unaffected by expectations about whether an entity will exercise its
right to defer settlement of a liability, and clarify that settlement refers to the transfer to the counterparty of cash, equity instruments, other
assets or services. Issued 23 January 2020, applies to accounting periods beginning on or after 1 January 2022, subject to EU endorsement.
Amendment to IAS 1: Classification of Liabilities as Current or Noncurrent – Deferral of Effective Date: the amendment defers the effective
date of the January 2020 amendments to IAS 1 by one year to annual reporting periods beginning on or after 1 January 2023. Issued 15 July
2020, applies to accounting periods beginning on or after 1 January 2023 with early application of the January 2020 amendments permitted,
subject to EU endorsement.
Amendments to IFRS 3: Business Combinations – reference to the Conceptual Framework: The changes in Reference to the Conceptual
Framework (Amendments to IFRS 3) update IFRS 3 so that it refers to the 2018 Conceptual Framework instead of the 1989 Framework. They
also add to IFRS 3 a requirement that, for transactions and other events within the scope of IAS 37 or IFRIC 21, an acquirer applies IAS 37 or
IFRIC 21 (instead of the Conceptual Framework) to identify the liabilities it has assumed in a business combination. Lastly, they add to IFRS 3
an explicit statement that an acquirer does not recognise contingent assets acquired in a business combination. Issued 14 May 2020, applies
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for annual periods beginning on or after 1 January 2020, with early application permitted if an entity also applies all other updated references
at the same time or earlier, subject to EU endorsement.
Annual Improvements to IFRS Standards 20182020: The pronouncement contains amendments to four International Financial Reporting
Standards (IFRSs) as result of the IASB’s annual improvements project:
l
l
l
IFRS 1 Firsttime Adoption of International Financial Reporting Standards: subsidiary as a firsttime adopter The amendment permits a
subsidiary that applies paragraph D16(a) of IFRS 1 to measure cumulative translation differences using the amounts reported by its parent,
based on the parent’s date of transition to IFRSs.
IFRS 9 Financial Instruments fees in the ‘10 per cent’ test for derecognition of financial liabilities The amendment clarifies which fees
an entity includes when it applies the ‘10 per cent’ test in IFRS 9 in assessing whether to derecognise a financial liability. An entity includes
only fees paid or received between the entity (the borrower) and the lender, including fees paid or received by either the entity or the
lender on the other’s behalf.
IFRS 16 Leases Lease incentives the amendment to Illustrative Example 13 accompanying IFRS 16 removes from the example the
illustration of the reimbursement of leasehold improvements by the lessor in order to resolve any potential confusion regarding the
treatment of lease incentives that might arise because of how lease incentives are illustrated in that example. Issued 14 May 2020,
applicable for annual periods beginning on or after 1 January 2022 with early application permitted in respect of IFRS 1, IFRS 9, and IAS 41.
The amendment to IFRS 16 only regards an illustrative example, so no effective date is stated. All subject to EU endorsement.
The Group has not early adopted any of the above standards and the directors are assessing the impact on future financial statements. There
are no other IFRS or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.
AREAS OF ESTIMATES AND JUDGEMENT
The preparation of the Group’s financial statements in conformity with generally accepted accounting principles requires the use of estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based
on management’s best knowledge of current events and actions, actual results may ultimately differ from those estimates. The estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities in the next financial
year are discussed below:
a) Going concern
The Group’s going concern is detailed on page 75.
b) Recoverability of loan
The Group entered into an agreement with FRAM Exploration Trinidad Limited (“FRAM”), a whollyowned subsidiary of Bahamas Petroleum
Plc, who are listed on AIM.
The FRAM Loan is recovered from a share of revenues generated by FRAM from oil sales based on the production profile and oil price. At
lower oil prices and lower production rates the loan will take longer to be recovered as their share of revenues will be lower. Under the legally
binding WPA, Predator is entitled to its share of revenue earned from all oil sales made by FRAM until cost recovery of all Predator’s costs,
inclusive of the FRAM Loan, expended on the Project. Share of revenue is defined as sales from all oil barrels made by FRAM less agreed costs
defined in the WPA.
Management have concluded that the loan remains recoverable and that there is no impairment required at the reporting date as the project
is still in the early stages of production.
c) Useful lives of property, plant & equipment
Property, plant and equipment are depreciated over their useful economic lives. Useful economic lives are based on management’s estimates
of the period that the assets will be in operational use, which are periodically reviewed for continued appropriateness. More details, including
carrying values, are included in note 10 to the financial statements.
Share based payments
d)
The Group has applied the requirements of IFRS 2 Sharebased Payment for all grants of equity instruments.
The Group operates an equity settled share option scheme for directors. The increase in equity is measured by reference to the fair value of
equity instruments at the date of grant. The liabilities assumed under these arrangements convert into shares in the parent company, under
an option arrangement. The fair value of the service received in exchange for the grant of options and warrants is recognised as an expense.
Equitysettled sharebased payments are measured at fair value (excluding the effect of nonmarket based vesting conditions) at the date of
grant. The fair value determined at the grant date of equitysettled sharebased payment is expensed on a graded vesting basis over the vesting
period, based on the Group’s estimate of shares that will eventually vest, and adjusted for the effect of nonmarket based vesting conditions.
During the year the Company issued warrants in lieu of fees to stockbrokers. The warrant agreements do not contain vesting conditions and
therefore the full sharebased payment charge, being the fair value of the warrants using the BlackScholes model, has been recorded
immediately. A charge was recorded against share premium as a transaction cost. The valuation of these warrants involves making a number
of estimates relating to price volatility, future dividend yields and continuous growth rates (see Note 19).
The fair value of these share options is estimated by using the Black Scholes model on the date of grant based on certain assumptions. Those
assumptions are described in note 19 and include, among others, the expected volatility and expected life of the options. The expected life
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Statement of accounting policies
for the year ended 31 December 2020 (continued)
used in the model has been adjusted, based on management’s best estimate, for the effects of nontransferability exercise restrictions and
behavioural considerations. The market price used in the model is the issue price of the Company’s shares at the last placement of shares
immediately preceding the calculation date. Where the terms and conditions of options are modified before they vest, the increase in the fair
value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting
period.
Where equity instruments are granted to persons or entities other than staff, the fair value of goods and services received is charged to profit
or loss, except where it is in respect to costs associated with the issue of shares, in which case, it is charged to the share premium account.
The fair values calculated are inherently subjective and uncertain due to the assumptions made and the limitation of the calculations used.
Further details of the specific amounts concerned are given in note 19.
BASIS OF CONSOLIDATION
Where the Group has control over an investee, it is classified as a subsidiary. The Group controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power
to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these
elements of control.
The consolidated financial statements present the results of the Company and its subsidiaries (“the Group”) as if they formed a single entity.
Intercompany transactions and balances between Group companies are therefore eliminated in full. Uniform accounting policies are applied
across the Group.
The consolidated financial statements incorporate the results of business combinations using the acquisition method. In the statement of
financial position, the acquirer’s identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the
acquisition date. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on
which control is obtained. They are deconsolidated from the date on which control ceases.
FINANCIAL ASSETS
The Financial assets currently held by the Group and Company are classified as loans and receivables and cash and cash equivalents. These
assets are nonderivative financial assets with fixed or determinable payments that are not quoted in an active market. They are initially
recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at
amortised cost using the effective interest rate method less provision for impairment. The loans receivable from FRAM disclosed in note 12
are dependent on future oil production and are therefore outside of the scope of IFRS 9 Expected Credit Losses.
Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty
or default or significant delay in payment) that the Group will be unable to collect all of the amounts due under the terms receivable, the
amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows
associated with the impaired receivable. For receivables, which are reported net, such provisions are recorded in a separate allowance account
with the loss being recognised within administrative expenses in the statement of comprehensive income. On confirmation that the receivable
will not be collectable, the gross carrying value of the asset is written off against the associated provision.
Cash and cash equivalents
These amounts comprise cash on hand and balances with banks. Cash equivalents are short term, highly liquid accounts that are readily
converted to known amounts of cash. They include shortterm bank deposits and shortterm investments.
Any cash or bank balances that are subject to any restrictive conditions, such as cash held in escrow pending the conclusion of conditions
precedent to completion of a contract, are disclosed separately as “Restricted cash”. The security deposit is recognised within trade and other
receivables in note 12.
There is no significant difference between the carrying value and fair value of receivables.
Derecognition
The Group derecognises a financial asset when the contractual rights to the cash flow from the asset expire, or it transfers the asset and
substantially all the risk and rewards of ownership of the asset to another entity.
FINANCIAL LIABILITIES
The Group’s financial liabilities consist of trade and other payables (including short terms loans) and long term secured borrowings. These are
initially recognised at fair value and subsequently carried at amortised cost, using the effective interest method. All interest and other borrowing
costs incurred in connection with the above are expensed as incurred and reported as part of financing costs in profit or loss. Where any
liability carries a right to convertibility into shares in the Group, the fair value of the equity and liability portions of the liability is determined
at the date that the convertible instrument is issued, by use of appropriate discount factors.
Derecognition
The Group derecognises a financial liability when the obligations are discharged, cancelled or they expire.
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FOREIGN CURRENCY
The functional currency of the Group and all of its subsidiaries is the British Pound Sterling.
Transactions entered into by the Group entities in a currency other than the currency of the primary economic environment in which it operates
(the “functional currency”) are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are
translated at the rates ruling at the date of the statement of financial position. Exchange differences arising on the retranslation of unsettled
monetary assets and liabilities are similarly recognised immediately in profit or loss, except for foreign currency borrowings qualifying as a
hedge of a net investment in a foreign operation.
The exchange rates applied at each reporting date were as follows:
31 December 2020
£1: US$1.3642 and £1: Euro1.1089
31 December 2019
£1: US$1.3111 and £1: Euro1.1701
INVESTMENTS IN SUBSIDIARIES
The Group’s investment in its subsidiaries are recorded at cost.
Plant and equipment
The only assets the Group currently has are personal computers.
Depreciation is provided on equipment so as to write off the carrying value of items over their expected useful economic lives. It is applied at
the following rates:
Computer equipment
20% per annum, straight line
Share Options and Equity Instruments
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately
before and after the modification, is also charged to profit or loss over the remaining vesting period. Where equity instruments are granted
to persons other than consultants, the fair value of goods and services received is charged to profit or loss, except where it is in respect to
costs associated with the issue of shares, in which case, it is charged to the share capital or share premium account.
TAXATION
The Company and all subsidiaries (‘the Group’) are registered in Jersey, Channel Islands and are taxed at the Jersey company standard rate of
0%. However, the Group’s projects are situated in jurisdictions where taxation may become applicable to local operations.
The major components of income tax on the profit or loss include current and deferred tax.
Current tax
Current tax is based on the profit or loss adjusted for items that are nonassessable or disallowed and is calculated using tax rates that have
been enacted or substantively enacted by the reporting date.
Tax is charged or credited to the statement of comprehensive income, except when the tax relates to items credited or charged directly to
equity, in which case the tax is also dealt with in equity.
Deferred tax
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the statement of financial position differs
to its tax base, except for differences arising on:
l
l
The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects
neither accounting or taxable profit; and
Investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the difference
and it is probable that the differences will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the
difference can be utilised.
The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date and
are expected to apply when deferred tax liabilities/ (assets) are settled/ (recovered). Deferred tax balances are not discounted.
The Group currently does not hold any deferred tax asset or liability.
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Notes to the financial statements
for the year ended 31 December 2020
Segmental analysis
1.
The Group operates in one business segment, the exploration, appraisal and development of oil and gas assets. The Group has interests in
three geographical segments being Africa (Morocco), Europe (Ireland) and the Caribbean (Trinidad and Tobago)
The Group’s operations are reviewed by the Board (which is considered to be the Chief Operating Decision Maker (‘CODM’)) and split between
oil and gas exploration and development and administration and corporate costs.
Exploration and development is reported to the CODM only on the basis of those costs incurred directly on projects.
Administration and corporate costs are further reviewed on the basis of spend across the Group.
Decisions are made about where to allocate cash resources based on the status of each project and according to the Group’s strategy to
develop the projects. Each project, if taken into commercial development, has the potential to be a separate operating segment. Operating
segments are disclosed below on the basis of the split between exploration and development and administration and corporate.
Year ended 31 December 2020
Gross loss
Administrative and overhead expenses
Share options and warrant expense
Finance expense
(Loss) for the year from continuing operations
Noncurrent assets
Current assets
Total assets
Total liabilities
Year ended 31 December 2019
Gross Loss
Administrative and overhead expenses
Share options and warrant expense
Finance expense
(Loss) for the year from continuing operations
Total assets
Total liabilities
2. Group loss from operations
Operating loss is stated after charging/(crediting):
Auditors remuneration (note 3)
Depreciation
Share option expense
Foreign exchange loss
3. Auditors remuneration
Audit of the accounts of the Group
Other services
58 x Predator Oil & Gas Holdings plc Annual Report and Financial Statements 2020
Europe
£’000
Caribbean
£’000
Africa
£’000
Corporate
£’000
(128)
–
–
(128)
–
2
2
(1)
(187)
–
–
(187)
–
512
512
(14)
(235)
–
–
(235)
–
1,108
1,108
(3)
(914)
–
(225)
(1,139)
6
1,282
1,288
(65)
Europe
£’000
Caribbean
£’000
Africa
£’000
Corporate
£’000
(46)
–
–
(46)
33
(1)
(159)
–
–
(159)
239
(4)
(163)
–
–
(163)
1,150
(742)
(93)
(75)
(910)
76
(7)
(1,187)
2020
Group
£’000
2019
Group
£’000
53
23
1
2
102
93
105 27
2020
Group
£’000
23
–
–
2019
Group
£’000
23
30
53
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4. Administration expenses
Administration fees
Design, publishing, presentation and printing fees
Audit fee
Annual return fee
Nonexecutive director fees
Share based payments options
Share based payments warrants
Insurance
Legal and professional fees
Listing costs
Website costs
Licencing options
Directors fees
Technical Consultancy fees
Project costs
Travel expenses
Computer/system costs/IT support
Conferences and exhibitions
Bank charges
Depreciation
Sundry expenses
Foreign exchange
Formation costs
Accountancy fees
5.
Finance costs
Loan interest paid
Loan redemption fees
Amortisation of transaction costs
6.
Taxation
Loss on ordinary activities before tax
Loss on ordinary activities at Jersey standard 0% tax (2019 : 0%)
Tax charge for the year
No deferred tax asset or liability has been recognised as the Standard Jersey corporate tax rate is 0%.
2020
Group
£’000
2019
Group
£’000
81
15
23
1
74
102
100
11
86
155
3
–
161
286
150
37
23
–
42
2
1
105
3
3
84
10
23
1
70
93
–
8
81
251
13
8
144
262
–
94
3
2
26
1
3
27
–
–
1,464
1,204
2020
Group
£’000
17
112
96
225
2020
Group
£’000
(1,690)
–
–
2019
Group
£’000
–
–
75
75
2019
Group
£’000
(1,279)
–
–
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Notes to the financial statements
for the year ended 31 December 2020 (continued)
7.
Personnel
Consultancy fees
Share based payments
The average number of personnel (including directors) during the year was:
Management
2020
Group
£’000
521
102
623
4
4
2019
Group
£’000
477
93
570
5
5
Four Directors at the end of the period have share options receivable under long term incentive schemes. The highest paid Director received
an amount of £178,200 (2019: £150,310). The Group does not have employees. All personnel are engaged as service providers
8.
Earnings per share
Weighted average number of shares
Loss for the year (£’000)
Earnings per share basic and diluted (pence)
2020
Group
2019
Group
209,959,715 104,261,956
(1,279)
(1.2)
(1,690)
(0.8)
Dilutive loss per Ordinary Share equals basic loss per Ordinary Share as, due to the losses incurred in 2020 and 2019, there is no dilutive effect
from the subsisting share options
Loss for the financial year
9.
The Group has adopted the exemption in terms of Companies (Jersey) law 1991 and has not presented its own income statement in these
financial statements.
10. Property, plant and equipment
Cost
At 31 December 2019
Additions
Disposals
At 31 December 2020
Amortisation
At 31 December 2019
Disposals
Charge for the year
At 31 December 2019
Carrying amount
At 31 December 2019
At 31 December 2020
11.
Investment in subsidiaries
Cost at the beginning of the year
Additions during the year
60 x Predator Oil & Gas Holdings plc Annual Report and Financial Statements 2020
£
8,708
842
(999)
8,551
1,550
(233)
1,642
2,959
7,158
5,592
2019
Group
£’000
537
–
537
2020
Group
£’000
537
–
537
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The principal subsidiaries of Predator Oil and Gas Holdings Plc, all of which are included in these consolidated Annual Financial Statements,
are as follows:
Predator Oil and Gas Ventures Limited
Country of Proportion
registration Class held by Group
Jersey Ordinary 100%
Predator Oil & Gas Trinidad Limited
Jersey Ordinary 100%
Predator Gas Ventures Limited
Jersey Ordinary 100%
Predator LNG Ireland Limited
Jersey Ordinary 100%
Nature of business
Licence option
offshore Ireland
Profit rights
for production
revenues from
a CO2 enhanced oil
recovery project
Exploration licence
onshore Morocco
Licence application
to import liquified
natural gas
The registered address of all of the Group’s companies is at 3rd Floor, Standard Bank House, 47–49 La Motte Street, St. Helier, Jersey, JE2 4SZ,
Channel Islands
12. Trade and other receivables
Current
Loans receivable
Security deposit (US$1,500,000)
Prepayments and other debtors
2020
Group
£’000
468
1,100
10
1,578
2019
Group
£’000
201
1,144
36
1,381
Loans receivable relates to a loan of £468,211 effected to FRAM Exploration Trinidad Limited (‘FRAM’) in respect of the CO2 EOR project
comprising USD338,796 advanced as cash and USD299,936 advanced as equipment. The loans are denominated in US Dollars, unsecured,
interest free and repayable at the discretion of Predator Oil & Gas Trinidad Limited provided not less than one week’s notice is given. The CO2
EOR project is expected to progress to the next stage of development in 2021 and ultimately to full production status at which time the
aforesaid loan is likely to be recovered in terms of a Well Participation Agreement with FRAM dated 17 November 2017.
A security deposit of $1,500,000 is held by Barclays Bank in respect of a guarantee provided to Office National des Hydrocarbures et des Mines
(ONHYM) as a condition of being granted the Guercif exploration licence. These funds are refundable in two tranches on the completion of
the Minimum Work Programme set out in the terms of the Guercif Petroleum Agreement and Association Contract.
Prepayments are in respect of amounts paid in advance to the Financial Conduct Authority, media service providers and an insurance premium.
These amounts are expensed between 60 and 120 days and are denominated in Pounds Sterling.
There are no material differences between the fair value of trade and other receivables and their carrying value at the year end.
13. Cash and cash equivalents
Royal Bank of Scotland International Limited
Barclays Bank Plc
14. Trade and other payables
Current
Loans payable
Trade payables
Accrued expenses
2020
Group
£’000
1,317
9
1,326
2020
Group
£’000
–
83
–
83
2019
Group
£’000
110
–
110
2019
Group
£’000
37
54
188
279
All payables are required to be settled within 30 days.
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Notes to the financial statements
for the year ended 31 December 2020 (continued)
15. Financial instruments – risk management
Details of the significant accounting policies in respect of financial instruments are disclosed on pages 78 to 79. The Group’s financial
instruments comprise cash and items arising directly from its operations such as other receivables, trade payables and loans.
FINANCIAL RISK MANAGEMENT
The Board seeks to minimise its exposure to financial risk by reviewing and agreeing policies for managing each financial risk and monitoring
them on a regular basis. No formal policies have been put in place in order to hedge the Group’s activities to the exposure to currency risk or
interest risk; however, the Board will consider this periodically.
The Group is exposed through its operations to the following financial risks:
l
Credit risk
l Market risk (includes cash flow interest rate risk and foreign currency risk)
l
Liquidity risk
The policy for each of the above risks is described in more detail below.
The principal financial instruments used by the Group, from which financial instruments risk arises are as follows:
l
l
l
l
Receivables
Cash and cash equivalents
Trade and other payables (excluding other taxes and social security)
Loans: payable within one year and payable in more than one year
The table below sets out the carrying value of all financial instruments by category and where applicable shows the valuation level used to
determine the fair value at each reporting date. The fair value of all financial assets and financial liabilities is not materially different to the
book value.
Loans and receivables
Cash and cash equivalents
Trade and other receivables
Other liabilities
Trade and other payables (excluding short term loans)
Loans payable within one year
2020
£’000
1,326
1,578
83
–
–
2019
£’000
110
1,381
266
38
918
CREDIT RISK
Financial assets, which potentially subject the Group to concentrations of credit risk, consist principally of cash, shortterm deposits and other
receivables. Cash balances are all held at recognised financial institutions. Other receivables are presented net of allowances for doubtful
receivables. Other receivables currently form an insignificant part of the Group’s business and therefore the credit risks associated with them
are also insignificant to the Group as a whole.
The Group has a credit risk in respect of intercompany loans to subsidiaries. The Company is owed £2,507,110 by its subsidiaries. The
recoverability of these balances is dependent on the commercial viability of the exploration activities undertaken by the respective subsidiary
companies. The credit risk of these loans is managed as the Directors constantly monitor and assess the viability and quality of the respective
subsidiary’s investments in intangible oil and gas assets.
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Maximum exposure to credit risk
The Group’s maximum exposure to credit risk by category of financial instrument is shown in the table below:
Cash and cash equivalents
Receivables
Loans and borrowings
2020
Carrying
value
£’000
1,326
1,578
–
2020
Maximum
exposure
£’000
3,327
1,578
–
The holding company’s maximum exposure to credit risk by class of financial instrument is shown in the table below:
Cash and cash equivalents
Receivables
Loans to Group Companies
2020
Carrying
value
£’000
1,271
1,578
2,507
2020
Maximum
exposure
£’000
3,272
1,578
2,507
2019
Carrying
value
£’000
110
1,381
956
2019
Carrying
value
£’000
110
1,381
1,958
2019
Maximum
exposure
£’000
1,160
1,381
956
2019
Maximum
exposure
£’000
110
1,381
1,958
MARKET RISK
Cash flow interest rate risk
The Group has adopted a nonspeculative policy on managing interest rate risk. Only approved financial institutions with sound capital bases
are used to borrow funds and for the investments of surplus funds.
The Group seeks to obtain a favourable interest rate on its cash balances through the use of bank deposits. The Group’s bank did not pay
interest on cash balances during the year, therefore the Group is not currently affected by interest rate changes. At 31 December 2020, the
Group had a cash balance of £1.326 million (2019: £0.110 million) which was made up as follows:
Sterling
United States Dollar
2020
£’000
165
1,161
1,326
2019
£’000
85
25
110
The Group had no interest bearing debts at the year end (2019: £37,500).
Foreign currency risk
Foreign exchange risk is inherent in the Group’s activities and is accepted as such. The majority of the Group’s expenses are denominated in
Sterling and therefore foreign currency exchange risk arises where any balance is held, or costs incurred, in currencies other than Sterling. At
31 December 2020 and 31 December 2019, the currency exposure of the Group was as follows:
at 31 December 2020
Cash and cash equivalents
Trade and other receivables
Trade and other payables
at 31 December 2019
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Loans repayable after one year
Sterling
£’000
US Dollar
£’000
165
13
83
85
36
304
918
1,161
1,565
–
25
1,345
–
–
Total
£’000
1,326
1,578
83
110
1,381
304
918
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Notes to the financial statements
for the year ended 31 December 2020 (continued)
LIQUIDITY RISK
Any borrowing facilities are negotiated with approved financial institutions at acceptable interest rates. All assets and liabilities are at fixed
and floating interest rate. The Group seeks to manage its financial risk to ensure that sufficient liquidity is available to meet the foreseeable
needs both in the short and long term. See also references to Going Concern disclosures in the Strategic Report.
CAPITAL
The objective of the Directors is to maximise shareholder returns and minimise risks by keeping a reasonable balance between debt and
equity. At 31 December 2020 the Group had no debt (2019: £955,906).
16. Share Capital
Issued and fully paid
Opening Balance
28 February 2020
Share issue
7 April 2020
Share issue
8 April 2020
Loan note conversion
13 May 2020
Loan note conversion
20 May 2020
Loan note conversion
29 May 2020
Share issue
17. NonCurrent liability
Arato Global Opportunities LLC
Brought forward
Drawdowns
Redemptions
Transaction costs
Amortisation of transaction costs
Number of shares Nominal value
108,172,169
2,346,336
89,000,000
3,560,000
4,875,000
195,000
5,267,118
73,500
5,217,462
104,475
4,707,926
104,475
22,438,842
448,778
239,678,517
6,832,564
2020
Group
£’000
918
–
(1,015)
–
97
–
2019
Group
£’000
–
1,500
(485)
(97)
–
918
The Company entered into a Convertible Loan Note Instrument with Arato Global Opportunities LLC on 15 February 2019 for £1,500,000, the
nominal amount of each note was £1.00 and could be increased to £1,750,000. The notes were converted at 105% in multiples of £50,000 at
a conversion price per ordinary share being 90% of the VWAC for the 2 trading days preceding the conversion, and to the extent not already
redeemed or converted were to be redeemed in full the earlier of 15 February 2021 or in the event of default.
The loan notes carried no coupon and were repayable at a premium of 5%. A fee of 10% of the principal amount applied if the loan notes
were not converted into equity prior to 15 February 2021. The lender was issued with 2,083,333 warrants at an exercise price of 12p with a
vesting period of two years. Novum Securities Limited, the arranger of the convertible loan notes, was issued with 2,000,000 in warrants on
the same terms.
The fair value of the 4,083,333 warrants was determined at £81,384.
Novum Securities Limited was paid a £90,000 placement fee for the Convertible Loan Note Instrument. The total transaction cost of £171,384
was accounted for in terms of IFRS9 was offset against the carrying value of the Convertible Loan Note and amortised according to the effective
interest rate method giving rise to a £96,594 charge to the income statement during the year.
During the year loan notes with a value of £269,000 were converted to shares. The remaining balance of the loan of £746,000 was repaid in
cash on 15 May 2020.
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18. Other reserves
Share based payments reserve
Balance brought forward
Issue of warrants
Fair value movement of share options
Balance carried forward
19. Share based payments
Warrant and share option expense
Warrant and share option expense:
– in respect of remuneration contracts
– in respect of financing arrangements
Share Options
2020
Group
£’000
2019
Group
£’000
82
256
101
81
102 93
459
256
2020
£’000
2019
£’000
102
93
100 81
202
174
The Group operates a share option plan for directors. Details of share options granted are noted below.
On 24 May 2018 both Paul Griffiths and Ron Pilbeam were granted share options each of 4,005,486 exercisable at £0.028 each and Steve
Staley and Sarah Cope were granted share options each of 1,001,370 exercisable at £0.028 each. The options are subject to the following
vesting conditions:
1/3 of the option shares 3,337,904 on gross production from the wells drilled under the Well Participation Agreement Predator Oil and Gas
Ventures Limited and FRAM Exploration Trinidad Limited of 50 BOPD (measured over a consecutive 30 day period)
1/3 of the option shares 3,337,904 on incremental gross production from a Pilot C02 test of 300 BOPD (measured over a consecutive 30 day
period)
1/3 of the option shares 3,337,904 on incremental total gross production from wells for which the Company receives revenues of 1,000 BOPD
(measured over a consecutive 30 day period)
Each option shall lapse 5 years after the date on which it vests, assuming it is not exercised before then and no event occurs to cause it to
lapse early.
On 27 October 2020 both Paul Griffiths and Ron Pilbeam were granted share options each of 3,850,000 exercisable at £0.05 each and
Steve Staley and Louis Castro were granted share options each of 1,650,000 exercisable at £0.05 each.
In February 2021 vesting requirements for all options held by Executive Directors Paul Griffiths and Ronald Pilbeam became subject to any
one of certain targets being reached as follows:
Injection/sequestration of 600MT Liquid CO2 has been achieved for the CO2 EOR Pilot Project under the Well Participation Agreement between
Predator Oil & Gas Trinidad Ltd and FRAM Exploration Trinidad Ltd dated 17 November 2017 and as amended from time to time; OR
A production test at AT5X has flowed first oil; OR
An average daily increase of 75% in oil production at AT12 has been achieved over a consecutive period of 30 days when measured against
historical AT12 production over the period 1 January to 30 April 2020 immediately prior to the commencement of CO2 injection in the
AT4 Block on 18 May 2020.
Vesting requirements for Nonexecutive Directors Steve Staley and Louis Castro are subject to the expiration of six months from the date of
grant.
The Board is not planning to consider any other components of director remuneration during the year under review.
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Notes to the financial statements
for the year ended 31 December 2020 (continued)
The Black Scholes model has been used to fair value the options, the inputs into the model were as follows :
Grant date
Share price
Exercise price
Term
Expected volatility
Expected dividend yield
Risk free rate
Fair value per option
Total fair value of the options
2018
2020
£0.0325
£0.028
£0.050
£0.028
7 years
5 years
400%
400%
0%
0%
0.80%
0.09%
£0.028 £0.0325
£280,382
£357,500
The total share option expense in respect of 2020 is £101,973 (2019: £93,461).
Warrants
On 24 May 2018 the Company granted 2,231,248 warrants to Novum Securities Limited and 160,714 warrants to Optiva Securities Limited in
consideration of services provided to the Company pursuant to the terms of the Placing Agreement and conditional upon admission becoming
effective. The warrants may be exercised at £0.028 each in whole or in part at any time and from time to time from the date of their grant
until the third anniversary of admission. The total fair value of these warrants was determined as £0.0113 per warrant and a £27,051 reserve
was created for the year ended 31 December 2018.
On 15 February 2019 the Company granted 2,083,333 and 2,000,000 warrants respectively to Arato Global Opportunities LLC and Novum
Securities Limited pursuant to the Convertible Loan Note (‘CLN’) agreement. The warrants are exercisable at any time between the date of
issue and 15 February 2021 at a subscription price of 12p per share. Expected volatility was determined by reference to the Company’s share
price since admission to the Standard List of the London Stock Exchange and the year end. The riskfree rate is based on the UK threeyear
bond yield. The warrant agreements for the aforesaid 4,083,333 do not contain vesting conditions and therefore the full sharebased payment
charge, being the fair value of the warrants using the BlackScholes model, has been recorded immediately. A fair value of £81,384 was deemed
as a transaction cost in terms of IFRS9 and was offset against the Convertible Loan Note Principal of £1,500,000. In addition, Novum Securities
Limited was paid a £90,000 placement fee for the Convertible loan note instrument taking the total CLN transaction cost to £171,384.
On 17 February 2020 the Company granted 1,875,000 and 2,575,000 warrants respectively to Optiva Securities Limited and Novum Securities
Limited. The warrants are exercisable at any time between the date of issue and 27 February 2023 at an exercise price of 4p per share.
The warrant agreements for the aforesaid 4,450,000 warrants issued on 17 February 2020 do not contain vesting conditions and therefore
the full sharebased payment charge, being the fair value of the warrants using the BlackScholes model, has been recorded immediately.
The valuation of these warrants involves making a number of estimates relating to price volatility, future dividend yields and continuous
growth rates.
The Black Scholes model has been used to fair value the options, the inputs into the model were as follows:
Grant date
Share price
Exercise price
Term
Expected volatility
Expected dividend yield
Risk free rate
Fair value per warrants
Total fair value of the warrants
17 February 2020
£0.043
£0.040
3 years
80%
0%
0.37%
£0.023
£100,451
20. Reserves
Details of the nature and purpose of each reserve within owners’ equity are provided below:
l
l
l
l
Share capital represents the nominal value each of the shares in issue.
The Other Reserves are included in the Consolidated Statement of Changes in Equity and in the Consolidated Statement of Financial
Position and represent the accumulated balance of share benefit charges recognised in respect of share options and warrants granted
by the Company, less transfers to retained losses in respect of options exercised or lapsed.
The Retained Deficit Reserve represents the cumulative net gains and losses recognised in the Group’s statement of comprehensive
income.
The Reconstruction Reserve arose through the acquisition of Predator Oil and Gas Ventures Limited. This entity was under common
control and therefore merger accounting was adopted.
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FINANCIAL
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INVESTOR
INFORMATION
21. Related party transactions
Directors and key management emoluments are disclosed in note 7 and in the Remuneration report.
22 Contingent liabilities and capital commitments
The Group had at the reporting date no capital commitments or contingent liabilities.
23 Litigation
The Group is not involved in any litigation.
24 Events after the reporting date
18 January 2021
The Company announced an Operations Update indicating that very encouraging Pilot CO2 EOR results at InnissTrinity supported commencing
CO2 injection at new rates determined by the results of the Pilot CO2 EOR Project and maintaining these for up to twelve months to reach, by
cumulative monthly growth, target plateau production for the Herrera #2 Sand in the AT4 Block in the range 243 to 547 bopd, in alignment
with prePilot CO2 EOR desktop forecasts. The prePilot CO2 EOR success derisked CO2 EOR in Trinidad and provided the commercial,
environmental and technical model for the further expansion of operations.
The Company also indicated that Guercif exploration well planning was targeting a well to be drilled in Q 2 2021.
3 February 2021
The Company noted, in the context of its longstanding applications for successor authorisations to its Corrib South and Ram Head licensing
options offshore Ireland, the renewed commitment by the Irish Government to honour existing licences issued by the State for oil and gas.
16 February 2021
The Company announced that the Warrant Instrument with Novum Securities Ltd dated 15 February 2019 granting the right to subscribe in
cash for 2,000,000 ordinary shares exercisable at a price per share equal to the subscription price (12p per share) was being amended to
allow the exercise date of the warrants to be extended by one year to the third anniversary of the date of the Warrant Instrument.
Similarly, the Warrant Instruments with Novum Securities Ltd and Optiva Securities Ltd dated 24 May 2018 granting the right to subscribe in
cash for 2,231,248 and 160,714 ordinary shares respectively exercisable at a price per share equal to the subscription price (2.8p per share)
was being amended to allow the exercise date of the warrants to be extended by one year to the third anniversary of the date of the Warrant
Instruments.
This is in recognition of the fact that COVID19 has played a part in extending the Company’s original timelines for executing some of its
projects.
These existing warrants have previously been factored into the fully diluted share capital of the Company.
The Warrant Instrument with Arato Global Opportunities pursuant to the Convertible Loan Note dated 15 February 2019 granting the right to
subscribe in cash for 2,000,000 ordinary shares exercisable at a price per share equal to the subscription price (12p per share) has expired
without the warrants being exercised resulting in a reduction of the Company’s fully diluted share capital.
Well swab tests and investigations in the AT4 Block at InnissTrinity confirmed the potential for realising preinjection desktop production
plateau forecasts in the range 243 547 bopd from Herrera #2 Sand.
The Company also announced that the MOU1 well pad construction was scheduled to be prepared for April 2021.
12 March 2021
The Company announced that it had conditionally placed 17 million new ordinary shares of no par value in the Company at a placing price
of 10.5 pence each to raise £1,785,000 (before expenses).
Timing of the MOU1 Moroccan exploration well was reconfirmed as being scheduled for Q2 2021 and that some of the placing funds were
to provide a contingency for the increase in certain MOU1 well costs occasioned by the 12month long COVID19 pandemic leading to the
additional expense burden to remobilise services and equipment previously immediately available in Morocco.
Further expansion of the InnissTrinity C02 EOR project was being considered and new business development opportunities were progressing.
Potential for developing an integrated project plan designed to help meet security of energy supply concerns; options for CO2 sequestration;
and options for backup power for data centres using greener energy was outlined.
The potential for utilising the Ram Head gas discovery in the Celtic Sea, still the subject of the Company’s application for a successor
authorisation, for gas storage and security of supply and in the longer term for C02 sequestration was outlined in the context of a coordinated
infrastructure project with green energy options.
17 March 2021
The Company announced that it had received an exercise notice in respect of warrants issued pursuant to a warrant agreement with the
Company dated 24 May 2018 (in connection with the Placing carried out by the Company in May 2018 on admission of the Company to the
Official List (standard listing segment) of the London Stock Exchange’s main market for listed securities) to subscribe for 267,750 new shares
of no par value each in the Company at 2.8p per share following receipt of the aggregate £7,497 subscription price.
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Notes to the financial statements
for the year ended 31 December 2020 (continued)
18 March 2021
The Company announced scoping development and operating costs for a pilot Compressed Natural Gas (“CNG”) Project at Guercif in Morocco
based on a 10 mm cfgpd profile for 10 years, net capital costs to the Company of £8.2 to 8.6 million and estimated operating costs of US$2.79
to 4.24/mcf with an example netback of US$7.21/mcf after taxes based on a sales price to the Moroccan industrial market of US$ 10 to
12/mcf.
In the context of the Company’s Floating Storage and Regasification Unit (“FSRU”) and LNG project offshore Ireland, the Company announced
that it is making a submission to the Public Consultation on the expert advisory group report entitled “Expanding Ireland’s Marine Protected
Area Network”, published by the Department of Housing, Local Government and Heritage. Deadline for submissions is 30 July 2021. This will
be in conjunction with the Company applying for Marine Area Consent for the FSRU project.
26 March 2021
The Company announced that further to its announcement of 12 March 2021, that it did not have sufficient headroom to enable the issue
and admission of all of the 17,000,000 Placing Shares which are required to be issued pursuant to the Placing without the production of an
FCA approved prospectus. The Company is therefore issuing 5,215,155 new ordinary shares (up to its existing headroom) and for a director,
Paul Griffiths, to make up the shortfall with a transfer of 11,784,845 existing shares held by him to Novum Securities.
When the Company has the ability to issue further shares it intends to issue Paul Griffiths 11,784,845 new Ordinary Shares and will take all
necessary steps required in order to make the necessary listing and admission hearing applications. This will put Paul Griffiths back into the
position that existed, in terms of his aggregate shareholding in the Company, had he not made the transfer of Ordinary Shares. For the avoidance
of doubt the transfer of shares to Novum Securities Ltd from Paul Griffiths involves no consideration being paid to Paul Griffiths.
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BUSINESS
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OUR
GOVERNANCE
FINANCIAL
STATEMENTS
INVESTOR
INFORMATION
Corporate Information
Directors
Company Secretary
Registered Office
Joint Broker and Placing Agent
Joint Broker and Placing Agent
Auditors
Paul Stanard Griffiths (Executive Director – CEO)
Ronald Pilbeam (Executive Director)
Carl Kindinger (resigned 29 June 2020)
Louis Castro (appointed 13 July 2020)
Dr George Henry Stephen Staley (NonExecutive Chairman)
Oak Secretaries (Jersey) Limited
3rd Floor, Standard Bank House
47 – 49 La Motte Street
St. Helier
Jersey JE2 4SZ
3rd Floor, Standard Bank House
47 – 49 La Motte Street
St. Helier
Jersey JE2 4SZ
Telephone +44 (0) 1534 834 600
Novum Securities Limited
Lansdowne House
57 Berkeley Square
London W1J 6ER
Optiva Securities Limited
49 Berkeley Square
London W1J 5AZ
PKF Littlejohn LLP
15 Westferry Circus
Canary Wharf
London E14 4HD
Legal advisers to the Group as to
English law
Charles Russell Speechlys LLP
5 Fleet Place
London EC4M 7RD
Legal advisers to the Group as to
Jersey law
Pinel Advocates
7 Castle Street St.
St. Helier
Jersey JE2 3B
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Corporate Information (continued)
Competent Person
Registrar
Financial PR
Principal Bankers
SLR Consulting (Ireland) Ltd
7 Dundrum Business Park
Windy Arbour
Dublin 14, D14 N2Y7
Republic of Ireland
Computershare Investor Services (Jersey) Limited
Queensway House
Hilgrove Street
St. Helier
Jersey JE1 1ES
Flagstaff Strategic and Investor Communications
1 King Street
London EC2V 8AU
The Royal Bank of Scotland International Limited
P.O. Box 64
Royal Bank House
71 Bath Street
St. Helier
Jersey JE4 8PJ
Barclays Bank Plc
13 Library Place
St. Helier
Jersey JE4 8NE
70 x Predator Oil & Gas Holdings plc Annual Report and Financial Statements 2020
Perivan 261085
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Contents
Business Review
1 Chairman’s statement
3 Strategy
4 Group Strategic Report
11 Key Performance Indicators
12 Group Structure and List of
Assets
30 Principal Risk and Uncertainties
Our Governance
35 Report of the directors
38 Board of directors
39 Corporate Governance Report
42 Directors’ Remuneration Report
Investor Information
69 Corporate Information
Financial Statements
47 Independent Auditor’s Report
50 Consolidated statement of
comprehensive income
51 Consolidated statement of
financial position
52 Consolidated statement of
changes in equity
53 Consolidated statement of
cash flows
54 Statement of accounting
policies
58 Notes to the financial
statements
261085 00 Predator Cover Spread 3mm spine.qxp 07/06/2021 16:27 Page 1
Predator Oil & Gas Holdings Plc
Annual Report for the Year ended 31 December 2020
ESG focussed with substantive
progress on three continents
in Energy Transition to reduce
carbon emissions